Shares of Core & Main (NYSE:CNM) dropped sharply in premarket trading Tuesday following the company’s announcement of fiscal second-quarter results that fell short of market expectations, along with a reduced outlook for the full year.
The water infrastructure firm reported earnings per share (EPS) of $0.70 for Q2, below Wall Street’s anticipated $0.79. Revenue rose 6.6% year-over-year to $2.09 billion, slightly missing the $2.12 billion consensus. Adjusted EBITDA increased 3.5% to $266 million.
As of 07:45 ET, the stock was down 13.24% in early trading.
“I am proud of our associates’ dedication to supporting customers in delivering critical infrastructure projects,” said Mark Witkowski, CEO of Core & Main. “We achieved roughly 7% net sales growth in the second quarter and our balanced end market exposure served us well, with strength in municipal demand and stability in non-residential demand helping to offset softness in residential lot development.”
“At the same time, we are operating in an environment marked by higher operating expenses and softer residential demand. To address these dynamics, we have implemented targeted actions to improve productivity and operating margins,” he added.
Following the results, the company lowered its full-year revenue forecast to a range of $7.6 billion to $7.7 billion, below analysts’ expectations of $7.78 billion. This represents projected net sales growth of 2% to 3%, translating to average daily sales growth of 4% to 5%, the firm said.
Core & Main expects adjusted EBITDA between $920 million and $940 million, implying margins of 12.1% to 12.2%, and operating cash flow ranging from $550 million to $610 million.
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