IBP shares jump on strong Q4 earnings beat

COLUMBUS – Installed Building Products, Inc. (NYSE: NYSE:), a leading installer of insulation and complementary building products, reported a robust fourth quarter with earnings surpassing analyst expectations. The company’s adjusted earnings per share (EPS) for the quarter was $2.72, significantly higher than the consensus estimate of $2.44. Revenue also exceeded forecasts, coming in at $720.7 million against an expected $682.08 million.

Following the announcement, the stock is trading up 6.53% Thursday morning.

The company’s financial performance in the fourth quarter marked a continuation of its growth trajectory, with net revenue increasing by 5.0% compared to the same period last year. This growth was driven by a 4.5% increase in installation revenue, which reached $669.8 million, fueled by expansion in multi-family and commercial sales. These segments, including contributions from recent acquisitions, helped offset softer single-family sales. Other revenue, which encompasses IBP’s manufacturing and distribution operations, saw a significant rise of 12.0% to $50.9 million.

Net income for the quarter stood at $64.9 million, translating to $2.29 per diluted share. Adjusted net income saw an 11.9% increase to $77.3 million, or $2.72 per diluted share, reflecting the company’s effective cost management and strategic growth initiatives.

IBP’s Chairman and Chief Executive Officer, Jeff Edwards, highlighted the company’s ability to achieve record financial results, including net income and adjusted EBITDA, despite softer single-family sales. He attributed this success to the company’s efficient operations and the value delivered to customers across residential and commercial markets.

Looking ahead, Edwards expressed optimism for 2024, citing resilient residential housing construction activity, stable employment, and limited existing home inventory as factors that will continue to support building construction and demand for IBP’s services.

The stock’s movement reflects confidence in IBP’s strategic direction and its ability to deliver shareholder value through growth and capital returns, including a 6% increase in the regular quarterly cash dividend and a $0.70 per share increase in the annual variable dividend.

IBP’s focus on acquiring well-run installers of insulation and complementary building products remains central to its growth strategy. In 2023, the company completed eight acquisitions, representing approximately $75 million of annual revenue. For 2024, IBP aims to acquire at least $100 million of annual revenue, demonstrating its commitment to expanding its market presence and enhancing its service offerings.

The company’s strong liquidity position, with $386.5 million in cash and cash equivalents at the end of the year, positions it well to continue its growth trajectory and return capital to shareholders through dividends and share repurchases.

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