Carlisle Companies (CSL:NYSE) announced its 2023 first-quarter earnings on April 27, reporting the company had revenues of $1.2 billion, which is a decline of more than 21% year-over-year, representing a price of $2.57 per share.
The year’s first quarterly report missed analysts’ estimates of $2.62, according to Zacks Equity Research, and is a stark drop from earnings of $4.26 per share a year earlier. These figures are adjusted for non-recurring items.
The report represents an earnings surprise of -1.91%; during the fourth quarter of 2022, when many financial analysts expected the manufacturer to post earnings of $3.86 per share, it beat the street, pleasantly surprising Wall Street after producing earnings of $3.92, delivering a 1.55% gift.
Carlisle shares have lost about 9.8% since the beginning of the year versus the S&P 500's gain of 5.6%. The stock closed at $217 at the end of trading following its Q1 earnings report; it has a market cap of $11.06 billion; a price-to-earnings ratio hovering just above 12%; its 52-week high was $318.71 per share.
Revenue for the first quarter decreased 21.2% year-over-year, and organic revenue, defined as “revenue excluding acquired revenues within the last 12 months and the impact of changes in foreign exchange rates versus the U.S. dollar,” decreased 20.6%. The company noted that changes in foreign exchange rates had a negative 0.6% impact on revenues.
Operating income for the first quarter decreased 49.2% over the same period a year earlier, from $277.3 million in the first quarter of 2022 to $141.0 million in Q1 2023. Adjusted EBITDA for the first quarter of $213.8 million decreased 38.0% from $344.8 million in the first quarter of 2022.
Adjusted diluted earnings per share for the first quarter decreased 39.7% from $4.26 in the first quarter of 2022. According to the company, the decrease in EPS reflects the impact of lower volumes in its building products businesses; the decrease was partially offset by positive pricing across all segments and positive leverage at Carlisle Interconnect Technologies and Carlisle Fluid Technologies, and share repurchases.
"As expected and previously communicated, the first quarter of 2023 continued to reflect the destocking efforts by distributors and contractors in the building products industry,” Chris Koch, chair, president and CEO of Carlisle, said in a statement. “Additionally, inclement weather during the first quarter disrupted contractors' ability to complete jobs and better address pent-up demand.”
6 Highlights from Q1 Earnings Report
- First quarter revenues of $1.2 billion, declined 21.2% year-over-year
- Reported first quarter GAAP Diluted EPS of $1.92 and Adjusted EPS of $2.57, down 39.7%
- Channel inventory destock and inclement weather continued to be headwinds
- Contractor end market demand remains robust
- Pricing remained strong with year-over-year improvements in all segments
- Repurchased 200 thousand shares for $50 million in the quarter
Carlisle is a massive and diversified concern with its fingers in various pots beyond building materials. As noted previously, not all of its related subsidiaries fared poorly, with revenue at CIT and CFT up 15.4% and 2.3%, respectively.
However, as far as the RC audience is concerned, performance at its construction materials division [CCM] may be another harbinger of tough times ahead, with revenue down 34.6% year-over-year.
“We remain confident in our ability to execute throughout all segments, with improving momentum in CCM's orders entering the spring/summer construction season,” Koch said. “And with CWT, CIT and CFT [are] all tracking on plan for 2023 with upside potential."