Sign in

You're signed outSign in or to get full access.

BC

BOISE CASCADE Co (BCC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue was $1.74B and diluted EPS $1.64; both were slightly below Wall Street consensus, with EPS missing by ~$0.10 and revenue by ~0.4% as lower EWP/plywood pricing and Oakdale outage costs weighed on Wood Products . EPS consensus mean was $1.74 and revenue consensus was $1.75B (S&P Global data)*.
  • BMD executed well: sales $1.615B (-2% y/y, +15% q/q), gross margin 15.4% (+60 bps y/y), and EBITDA margin 5.7% despite higher selling/distribution expenses; general line product sales rose 4% y/y .
  • Management set Q3 guideposts: Wood Products EBITDA expected $20–$30M with sequential EWP price declines and plywood July pricing ~5% below Q2 average; BMD EBITDA “between $70M” with daily sales pace ~3% below Q2 .
  • Capital allocation remained active: dividend increased 5% to $0.22, H1 share repurchases of $86M plus $10M in July; liquidity stood at $876M with $481M cash and $395M revolver availability .

What Went Well and What Went Wrong

What Went Well

  • BMD margin resilience: gross margin 15.4% (+60 bps y/y) on strong general line mix; EBITDA margin improved to 5.7% q/q amid declining prices and stagnant demand. “We are pleased with our gross margin performance… focus to increase the portion of our sales in best in class general line products” .
  • Oakdale modernization substantially complete, enhancing efficiency and reliability. CEO: “the completion of this modernization project marks a significant milestone… reinforcing the value of self-sufficient veneer production as a key competitive advantage” .
  • Solid balance sheet supports growth and returns. “Our balance sheet remains strong… balanced deployment of capital” and end-market volatility creates a “distribution friendly environment” where two-step distribution can shine .

What Went Wrong

  • Wood Products profitability compressed: segment income fell to $14.0M (-81% y/y) on lower EWP/plywood prices, lower plywood volumes, higher per-unit conversion costs from planned downtime, and an unfavorable profit-in-inventory adjustment; EBITDA dropped to $37.3M (-61% y/y) .
  • EWP pricing erosion continued: sequential declines for LVL and I-joists (low-to-mid single digit expected into Q3); plywood July realizations ~5% below Q2 average, pressuring top line .
  • Near-term demand remains muted as affordability and consumer uncertainty constrain single-family activity; y/y single-family starts were down ~8% for Q2, a key demand driver for BCC .

Financial Results

Consolidated Results vs Prior Periods and Estimates

MetricQ2 2024Q1 2025Q2 2025Consensus (Q2 2025)
Sales ($USD Millions)$1,797.7 $1,536.5 $1,740.1 $1,747.1*
Diluted EPS ($)$2.84 $1.06 $1.64 $1.7417*
Adjusted EBITDA ($USD Millions)$181.2 $91.6 $119.0 —
EBITDA Margin (%)10.1% 6.0% 6.8% —

Values retrieved from S&P Global for consensus estimates (marked with asterisks).

Key comparisons:

  • Revenue: -3% y/y; +13% q/q on seasonal strength .
  • EPS: -42% y/y; +55% q/q as seasonal activity offset price headwinds .
  • Adjusted EBITDA: -34% y/y; +30% q/q .

Segment Breakdown

Segment MetricQ2 2024Q1 2025Q2 2025
Wood Products Sales ($USD Millions)$489.8 $415.8 $447.2
Wood Products Segment Income ($USD Millions)$72.8 $17.7 $14.0
Wood Products Segment EBITDA ($USD Millions)$95.1 $40.2 $37.3
BMD Sales ($USD Millions)$1,655.2 $1,407.1 $1,614.9
BMD Segment Income ($USD Millions)$85.4 $48.4 $78.0
BMD Segment EBITDA ($USD Millions)$97.1 $62.8 $91.8

KPIs and Operating Metrics

KPIQ2 2024Q1 2025Q2 2025
BMD Gross Margin (%)14.8 14.7 15.4
BMD EBITDA Margin (%)5.9 4.5 5.7
LVL volume (MCF)5,074 4,616 5,457
LVL net price ($/CF)$28.12 $26.09 $25.22
I-joist volume (MELF)65,788 54,711 62,469
I-joist net price ($/MELF)$1,961 $1,833 $1,801
Plywood volume (MSF 3/8")383,092 362,779 355,714
Plywood net price ($/MSF 3/8")$362 $341 $342
Cash & Equivalents ($USD Millions)—$561.8 $481.0
Total Liquidity ($USD Millions)—$957.5 $876.2
Long-term Debt ($USD Millions)—$446.4 $444.9

Price/volume change directional context:

  • LVL price: -10% y/y, -3% q/q; volume: +8% y/y, +18% q/q .
  • I-joist price: -8% y/y, -2% q/q; volume: -5% y/y, +14% q/q .
  • Plywood price: -6% y/y, flat q/q; volume: -7% y/y, -2% q/q .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapExFY 2025$220–$240M (Q1 reiterated) $220–$240M (maintained) Maintained
Dividend per shareQ3 pay date$0.21 (May declaration) $0.22 (5% increase) Raised
Wood Products EBITDAQ3 2025N/A$20–$30M New
BMD EBITDAQ3 2025N/A“between $70M”; daily sales pace ~3% below Q2 New
EWP PricingQ3 2025Modest erosion expected in Q2 Low-to-mid single-digit sequential declines Lowered
Plywood PricingQ3 2025 (July datapoint)N/AJuly ~5% below Q2 average Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
Residential demand/macro2025 outlook uncertain; starts ~1.35M; affordability headwinds Single-family starts -8% y/y; demand muted; builders moderating pace Deteriorating near-term
EWP pricingModest erosion expected in Q2 Sequential declines expected to persist into Q3 Deteriorating
Plywood operations/pricingPrice pressure in 2024; modernization projects planned Oakdale modernization substantially complete; July price ~5% below Q2 average Mixed (ops improving, pricing weaker)
BMD mix & marginsGeneral line products strengthening; gross margin support Gross margin 15.4% (+60 bps y/y), general line sales +4% y/y Improving mix/margins
Supply chain/channel inventoriesTypical volatility; two-step value proposition Customers leaning on next-day out-of-warehouse service; destocking likely into 2H25–2026 Distribution-friendly
Tariffs/trade policy uncertaintyFlagged as risk Potential for meaningful forward pricing volatility (plywood, lumber, commodities) Elevated risk
Labor/operations—Billings, MT BMD strike limited to 19 workers; no material impact anticipated Stable

Management Commentary

  • CEO on Oakdale and strategic positioning: “the completion of this modernization project marks a significant milestone… enhancing operational efficiency, strengthening reliability, and reinforcing the value of self-sufficient veneer production” .
  • CFO/COO on BMD execution: “BMD’s gross margin was 15.4%, a 60 basis point year over year improvement… a reflection of very good execution… and our focus to increase the portion of our sales in best in class general line products” .
  • CEO on distribution in uncertainty: “markets with limited clarity make for distribution friendly environments… we look forward to again demonstrating the value proposition of two step distribution” .
  • Outlook tone: Long-term drivers (undersupply of housing, aging stock, high homeowner equity) remain intact despite near-term affordability headwinds .

Q&A Highlights

  • EWP performance: LVL showed better resiliency given broader applications (beams, headers, wall framing) versus I-joists’ concentration in floor systems facing competitive pressure (plated trusses, dimensional lumber, slab-on-grade) .
  • Destocking dynamics: Expect less mill-direct ordering and more reliance on units/job packs/pieces out of distribution to manage working capital through 2025/early 2026 .
  • Operating rates and cost posture: EWP operating rates in low-80s in Q2; plywood ~70–80%; anticipating market-related downtime while leveraging veneer to plywood and benefiting from self-sufficient veneer and weaker OSB costs .
  • Labor update: Billings, MT strike limited in scope (19 union employees at 1 of 38 locations) with business continuity protocols; no material impact expected .
  • General line outlook: Inventories lean at customers; increased out-of-warehouse sales in Q2; general line expected to remain strong into balance of year .

Estimates Context

  • Q2 2025 result vs consensus: EPS $1.64 vs $1.7417 consensus (miss); revenue $1,740.1M vs $1,747.1M consensus (miss).* Drivers: lower EWP/plywood prices, planned Oakdale downtime and higher conversion costs; BMD margins held but opex rose .
  • Q1 2025 trend: EPS $1.06 vs $1.285 consensus (miss), but revenue $1,536.5M vs $1,526.2M (beat), reflecting early-year demand and price dynamics.*
  • Forward implications: With Q3 guide implying lower EWP pricing and plywood realizations down, estimates may need to come down for Wood Products profitability and EPS; BMD margins and general line mix provide partial offset .

Values retrieved from S&P Global for consensus estimates (marked with asterisks).

Key Takeaways for Investors

  • Near-term setup is cautious: single-family starts down, EWP pricing declining sequentially, and July plywood pricing ~5% below Q2 average—expect continued pressure on Wood Products profitability into Q3 .
  • Distribution strength is a buffer: BMD’s gross margin and general line mix improved; in a “distribution-friendly” environment, Boise’s next-day service and inventory position should capture share and support margin stability .
  • Watch Q3 EBITDA guideposts: Wood Products $20–$30M and BMD ~“between $70M” anchor expectations; any variance in commodity pricing or destock intensity could drive upside/downside surprise .
  • Cost/efficiency tailwinds ahead: Oakdale modernization completion and self-sufficient veneer, plus potential OSB/web stock cost relief, should begin to lift unit costs as operations normalize .
  • Capital returns continue: 5% dividend increase to $0.22 and ongoing buybacks ($96M YTD through July) signal confidence and provide support in a volatile macro backdrop .
  • Trading lens: The quarter’s slight EPS/revenue misses and cautious Q3 pricing outlook are modest negatives; monitor tariff/trade headlines and commodity price trajectories as catalysts for sentiment swings .
  • Medium-term thesis: Long-term housing undersupply, aging stock, and homeowner equity remain intact; Boise’s integrated EWP-plus-distribution model, ongoing capex in the Southeast and greenfield DCs (e.g., Hondo, TX) position the company for share and margin expansion when demand inflects .