EAGLE MATERIALS INC (EXP)·Q2 2026 Earnings Summary

Executive Summary

• Record Q2 FY26 revenue of $638.9M (+2% YoY) with diluted EPS of $4.23 (−1% YoY); revenue slightly beat S&P Global consensus ($635.5M*) while EPS modestly missed ($4.35*), reflecting softer wallboard volumes offset by strength in heavy materials . S&P Global estimates used for consensus comparisons.*
• Heavy Materials outperformed: cement volume +8% YoY and aggregates volume +103% (organic +35%), driving sector revenue +11% and operating earnings +11%; light materials was weaker as wallboard volume fell 14% and ASP declined 2% .
• Management announced cement price increases effective Jan 1, 2026 across most markets; FY26 capex range narrowed to $475–$500M (from $475–$525M) as Mountain (Laramie, WY) cement modernization and Duke (OK) wallboard upgrade progress on-time/on-budget .
• Liquidity and capital returns remain supportive: 396k shares repurchased for ~$89M; leverage at 1.6x net debt/Adj. EBITDA; total committed liquidity ~$520M, positioning EXP to fund projects, pursue M&A, and continue buybacks/dividends .

What Went Well and What Went Wrong

• What Went Well

  • Heavy Materials momentum: “Second quarter revenue was a record $639 million…heavy materials sector revenue was up 11%…cement sales volume increased by 8%” .
  • Aggregates scaling and profitability: record aggregates volume (2.0M tons, +103%) and Concrete & Aggregates operating earnings to a record $7.9M; organic aggregates +35% growth .
  • Strategic capex on track: “Laramie…modernization and expansion…on track to complete by end of calendar 2026,” targeting ~25% cement manufacturing cost reduction; Duke wallboard modernization expected to lower unit costs ~20% .

• What Went Wrong

  • Wallboard softness: volume −14% YoY to 648 MMSF; ASP −2% YoY; Light Materials operating earnings −20% .
  • EPS modestly below consensus: $4.23 vs $4.35* driven by lower wallboard volume and higher corporate/ERP costs (~$1.5M in Q2), partly offset by 4% reduction in diluted share count .
  • Texas cement pricing pressure: management noted Texas saw price degradation while other markets held “pretty stable,” weighing on reported ASP (cement ASP −1% YoY to $155.10/ton) .

Financial Results

Headline financials (actuals)

Q2 FY26 vs prior and vs estimates

• Consensus from S&P Global; values marked with * are from S&P Global.

Segment performance (actuals)

Operating KPIs and ASPs

Context and drivers

• YoY: Revenue +2% to record $638.9M on cement/aggregates strength; EPS −1% to $4.23 as lower wallboard volume offset share count reduction and heavy-side gains .
• QoQ: Revenue grew modestly vs Q1; heavier capex ($109M) with operating cash flow $205M (−12% YoY) on tax timing; net leverage 1.6x; cash $35M; committed liquidity ~$520M .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Record revenue of $639 million, gross margin of 31.3% and EPS of $4.23…significant progress on our Laramie, Wyoming plant modernization…construction of our Duke, Oklahoma wallboard plant upgrade” — Michael Haack, CEO .
• “Heavy materials…revenue was up 11%…operating earnings were also up 11%, primarily because of the 8% increase in cement sales volume” — Craig Kesler, CFO .
• “Wallboard volumes were impacted [as] builders pulled back…stability in wallboard pricing…structural changes benefiting our business” — Michael Haack, CEO .
• “Capital spending for fiscal 2026…$475 to $500 million…Mountain completes late calendar 2026; Duke has a full year of spend in FY27; step-down in FY28…accelerated depreciation will significantly reduce cash taxes paid” — Craig Kesler, CFO .
• “Texas…saw some price degradation [in cement], but the rest of the market hung in there pretty well” — Craig Kesler, CFO .

Q&A Highlights

• Wallboard demand drivers: Builder pullback in July–August led to −14% volume; management emphasizes trailing 12-month lens and long-term underconsumption (TTM ~26B sq ft vs late 1990s with a larger population today). Expect pricing stability, value over volume .
• Cement demand outlook: Infrastructure and private non-res (e.g., data centers) drive volumes; cautiously optimistic through fiscal year, with typical winter seasonality .
• Aggregates: Organic +35% growth aided by targeted capacity investments; acquisitions performing well; seasonality expected .
• Capex cadence and taxes: FY26 $475–$500M; step-down expected FY27–FY28; accelerated depreciation on Mountain and Duke to materially reduce FY27–FY28 cash taxes paid .
• Regional cement ASP: Texas pressure; otherwise stable; oil-well cement now a small mix for EXP .

Estimates Context

• Q2 FY26 revenue beat: $638.9M actual vs $635.5M consensus*; Q2 EPS miss: $4.23 actual vs $4.35 consensus*. Drivers: wallboard volume decline and regional cement ASP headwinds in Texas offset by cement/aggregates volume strength and buybacks . S&P Global estimates used for consensus comparisons.*
• Prior quarters for context: Q1 FY26 revenue $634.7M vs $608.8M consensus*; EPS $3.76 vs $3.68 consensus* (beat). Q4 FY25 revenue $470.2M vs $479.0M consensus*; EPS $2.00 vs $2.43 consensus* (miss) .
• EBITDA note: S&P “EBITDA Consensus Mean” for Q2 FY26 $238.0M* vs S&P “actual” $220.4M* differs from company-reported Adjusted EBITDA $233.3M due to methodology; investors should anchor on the company’s non-GAAP definition with reconciliation provided .

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

• Heavy-side momentum and announced Jan 1, 2026 cement price increases should support near-term revenue/earnings resilience despite wallboard softness; watch realization into calendar Q1 2026 .
• Capex execution remains on-track; FY26 spend narrowed to $475–$500M with step-downs projected in FY27–FY28, de-risking free cash flow and setting up cost reductions (~25% cement, ~20% wallboard at upgraded plants) .
• Expect improved cash flow in FY27–FY28 from accelerated depreciation on Mountain and Duke, providing additional balance sheet flexibility for M&A and buybacks .
• Short-term: stock reaction likely tied to the modest EPS miss vs consensus and commentary on cement price realization and wallboard demand; medium-term: infrastructure/private non-res pipelines and structural wallboard capacity dynamics remain favorable .
• Aggregates now a meaningful growth vector with organic and acquired capacity; seasonality applies, but profitability normalized after prior-year one-offs .
• Capital returns continue: buybacks ($89M in Q2) and dividend ($0.25 next payment), with leverage steady at ~1.6x and ~$520M liquidity, supporting optionality .

Appendix: Additional Detail

Wallboard and Cement KPIs commentary

• Wallboard: Volume −14% YoY; ASP −2% YoY; management highlights industry structural shifts (reduced synthetic gypsum availability steepening cost curve) supporting pricing stability despite demand softness .
• Cement: Volume +8% YoY; ASP −1% YoY overall (flat in wholly owned business), with Texas pricing pressure offset by other markets and planned price increases for Jan 1, 2026 .

Liquidity and leverage

• Net debt/Adj. EBITDA 1.6x; cash $35M; total committed liquidity ~$520M (no near-term maturities) .

Share repurchases

• Q2: 395,500 shares for ~$89M; remaining authorization ~3.9M shares at quarter-end .

Non-GAAP reconciliation

• Adjusted EBITDA Q2 FY26 $233.3M with reconciliation provided; management also provides net debt/Adj. EBITDA (1.6x) .

All company results and commentary are sourced from Eagle Materials’ Q2 FY26 8‑K/press release and earnings call, and prior-quarter materials and calls . S&P Global consensus values are noted with an asterisk.