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EAGLE MATERIALS INC (EXP)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY25 revenue was $470.2M (-1% YoY) and adjusted EPS was $2.08 (-7% YoY), with weakness driven by adverse weather and higher cement maintenance costs; adjusted EBITDA was $141.2M (-9% YoY) .
  • Results missed consensus: revenue (-$8.8M) and EPS (-$0.35) vs S&P Global estimates; Q2 and Q3 also modest misses, indicating a near-term estimate reset may be warranted as volumes recover and pricing actions are realized* [Q4: GetEstimates; Q3: GetEstimates; Q2: GetEstimates].
  • Heavy Materials headwinds included a pulled-forward annual JV outage and commissioning costs for the new Houston slag facility (~$4M impact) plus ~$10M in maintenance costs; Light Materials held up, with wallboard pricing modestly lower sequentially on higher freight .
  • FY26 capex is guided to $475–$525M (Mountain Cement modernization and Duke wallboard expansion) and dividend maintained at $0.25/share; management reiterated confidence in margin trajectory as demand normalizes and structural supply constraints persist .

What Went Well and What Went Wrong

What Went Well

  • Structural pricing/margin resilience: Wallboard and paperboard prices held firm YoY; recycled paperboard price +5% in Q4 with contractual pass-throughs, supporting sector margins .
  • Strategic growth execution: Commissioning of Houston slag facility, Mountain Cement expansion on time/on budget, and Duke wallboard modernization ($330M) position the portfolio for cost and capacity advantages .
  • Capital discipline and balance sheet: FY25 net leverage 1.5x, ~$560M liquidity, continued buybacks; internal hurdle rates ~15% cash-on-cash after-tax for major projects (confidence in returns) .

What Went Wrong

  • Weather and timing headwinds: Adverse weather (especially February) reduced cement and concrete volumes; JV outage pulled forward and commissioning costs weighed on Q4 (~$4M) .
  • Maintenance cost pressure: Q4 cement operating earnings down 26% on lower volumes and ~$10M maintenance costs; Q3 had ~$8M of non-typical maintenance across plants .
  • Concrete & Aggregates profitability: Q4 operating loss of -$9.4M tied to weather and purchase accounting impacts from acquisitions; management suggests viewing on EBITDA basis given transient effects .

Financial Results

MetricQ4 FY24Q2 FY25Q3 FY25Q4 FY25
Revenue ($USD Millions)$476.7 $623.6 $558.0 $470.2
Adjusted EPS ($USD)$2.24 $4.31 $3.59 $2.08
Diluted EPS ($USD)$2.24 $4.26 $3.56 $2.00
Adjusted EBITDA ($USD Millions)—$242.2 $208.8 $141.2
Estimates vs ActualsQ2 FY25Q3 FY25Q4 FY25
Revenue Consensus ($USD Millions)*$647.2*$575.4*$479.0*
Revenue Actual ($USD Millions)$623.6 $558.0 $470.2
Revenue Surprise ($USD Millions)*-$23.6*-$17.4*-$8.8*
EPS Consensus ($USD)*$4.647*$3.953*$2.426*
Adjusted EPS Actual ($USD)$4.31 $3.59 $2.08
EPS Surprise ($USD)*-$0.337*-$0.363*-$0.346*

Values retrieved from S&P Global.*

Segment Breakdown – Q4 FY25

SegmentRevenue ($USD Millions)Operating Earnings ($USD Millions)
Cement (Wholly Owned)$180.6 $23.2
Cement (Joint Venture)$26.4 (incl. JV revenue) $4.4
Concrete & Aggregates$54.3 -$9.4
Gypsum Wallboard$204.2 $80.3
Recycled Paperboard$31.0 $10.5
Total$470.2 $91.1 EBIT

KPIs – Q4 FY25

KPIValueCommentary
Cement sales volume (M tons)1.239 (-6% YoY) Weather/maintenance impacts
Cement avg net price ($/ton)$157.62 (+2% YoY) Pricing actions held
Concrete volume (M cubic yards)0.246 (-10% YoY) Weather headwind
Aggregates volume (M tons)1.183 (+69% YoY) Acquisitions boosted tonnage
Aggregates avg price ($/ton)$13.83 (+20% YoY) Pricing improving
Wallboard volume (MMSF)722 (-3% YoY) Demand steady but muted
Wallboard avg price ($/MSF)$231.54 (flat YoY; -2% seq) Higher freight pressured sequential pricing
Paperboard volume (k tons)84 (-2% YoY) Volume down modestly
Paperboard avg price ($/ton)$595.69 (+5% YoY) Contractual cost pass-throughs

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Company CapexFY26—$475–$525M New quantitative range
Duke Wallboard Modernization (Capex)Multi-year (start 2H CY2025)—~$330M project; startup 2H CY2027 New project
Mountain Cement ModernizationFY26–FY27—On time/on budget; +50% capacity, ~25% cost savings Execution update
Corporate SG&AFY26—“Model corporate SG&A at the same level” (ERP costs continue) Maintained
Wallboard PricingSpring 2025—Price increase planned; realization update next call Planned action
Cement PricingCalendar 2025Price increase announced in many markets April pricing actions in certain markets; update next call Ongoing
DividendQ1 FY26$0.25 (Feb 2025) $0.25 declared payable July 14, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
Heavy Materials demand and IIJAIIJA spending slower than expected; price increases planned for early 2025 No disruption in award funding; customers see healthy bidding; volumes improving in Mar/Apr Improving activity into construction season
Maintenance/outagesMajor non-typical maintenance ($6–$8M) in Q3; Tulsa and Texas Lehigh Pulled-forward JV outage; commissioning costs; ~$10M maintenance in Q4 Transient; normalization expected
Wallboard pricing/demandNov increase delayed to early 2025; pricing resilient despite muted housing Sequential price down ~2% on freight; spring price increase planned Stable-to-positive on planned increases
Alternative fuels & sustainabilitySlag capacity addition and Terra CO2 workstreams Alternative fuels (tire chips, feeders) and environmental projects progressing Expanding initiatives
Tariffs/macroAdmin change noise; infrastructure expected to continue; import tariff impact indirect Wallboard/cement excluded for MX/CA; cement import tariff ~$4–$6/ton effect minimal Limited direct impact
Capital allocationBuybacks and strong liquidity; leverage ~1.2x FY25 net leverage 1.5x; hurdle rates ~15%; liquidity ~$560M Continued discipline

Management Commentary

  • “We generated record revenue of $2.3 billion and gross profit margin of 29.8%…returned $332 million of cash to shareholders…net leverage ratio…1.5x.” (CEO) .
  • “Our fourth quarter results reflect the impact of adverse weather…we pulled forward the annual maintenance outage at our Texas Lehigh cement facility…” (CEO) .
  • “We have bogeys internal hurdle rates of 15% cash-on-cash after-tax type of returns…these projects don’t preclude us from continuing to explore M&A opportunities.” (CFO) .
  • “Considering these projects…we expect total company capital spending in fiscal 2026 to increase to a range of $475 million to $525 million.” (CFO) .

Q&A Highlights

  • Capital deployment discipline: Projects screened at ~15% cash-on-cash after-tax hurdle; balance sheet at ~1.5x leverage supports simultaneous M&A and buybacks .
  • Alternative fuels: Expanded tire-derived fuel usage and new feeders increase flexibility, CO2 benefits, and energy cost management .
  • Wallboard pricing cadence: Sequential decline driven ~half by freight; spring price increase planned, with realization update next call .
  • Cement margins outlook: Energy costs broadly stable; margin improvement expected with volume rebound; outage season (Apr/May) temporarily elevates costs .
  • Concrete & aggregates: Q4 operating loss deemed transitory due to acquisition accounting and weather; management advises EBITDA view .

Estimates Context

  • Over the last three quarters, EXP missed consensus on both revenue and EPS (adjusted) by modest amounts, consistent with adverse weather and maintenance timing impacts:
    • Q2 FY25: Revenue $623.6M vs $647.2M (-$23.6M); EPS $4.31 vs $4.647 (-$0.337)* .
    • Q3 FY25: Revenue $558.0M vs $575.4M (-$17.4M); EPS $3.59 vs $3.953 (-$0.363)* .
    • Q4 FY25: Revenue $470.2M vs $479.0M (-$8.8M); EPS $2.08 vs $2.426 (-$0.346)* .
  • Near-term revisions likely to reflect: improving cement volumes in Mar/Apr, planned pricing actions (wallboard spring, cement in some markets April), and normalization post maintenance/outage season .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Transient headwinds masked underlying strength: Weather and maintenance timing depressed Heavy Materials, but pricing/margins remain structurally supported; expect rebound into construction season .
  • Pricing catalysts: Spring wallboard increase and regionally staged cement price actions should support margins as volumes recover; watch realization updates in July .
  • Capex ramp and strategic optionality: FY26 capex ($475–$525M) accelerates modernization (cost savings/capacity) while buybacks and M&A continue under 1.5x leverage—supporting multi-year EPS power .
  • Aggregates growth: Two acquisitions expanded capacity (+50%) and diversified footprint; expect noise from purchase accounting to fade and EBITDA to improve .
  • Limited tariff exposure: Minimal direct impact from current tariff regimes (wallboard/cement exclusions for MX/CA; modest cement import tariff effect) .
  • Monitoring points for traders: June-quarter outage cost normalization, Mar/Apr volume trends sustaining into summer, freight dynamics affecting net wallboard pricing, and capex execution milestones .
  • Dividend and buybacks maintained: $0.25 quarterly dividend and ongoing repurchases provide capital return floor amid growth investments .