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It ignores revenue estimates and lowers full-year forecasts

  • Income: It reported $959.1 million, down 11.2% year over year, lower than the estimate of $964.55 million.

  • Net loss: It reported $(27.7) million from continuing operations compared to net income of $8.5 million in the prior year, well below estimated net income of $14.71 million.

  • Earnings per share (EPS): It reported ($0.32) from continuing operations, down from $0.10 in the same quarter last year, well below the EPS estimate of $0.18.

  • Adjusted EBITDA: There was $68.7 million from continuing operations, a decrease of $10.6 million from the prior year.

  • Free cash flow: $(45.7) million was used in Q1 2024 compared to $(24.3) million used in Q1 2023, indicating increased cash burn.

  • Guidelines for the whole year: Lowered 2024 revenue guidance to $3.9-4.1 billion and adjusted EBITDA to $340-380 million, reflecting softer market conditions.

  • Investment expenditure: Increased to $34.7 million in Q1 2024 from $23.6 million in Q1 2023 as part of ongoing investments in operational improvements.

JELD-WEN Holding Inc (NYSE:JELD), a global leader in the design, manufacture and distribution of high-performance building products, issued its 8-K filing on May 6, 2024, providing detailed information on financial results for the first quarter ended March 30, 2024 . The company recorded a decline in net revenues and revised down its full-year forecast, reflecting current challenges in the macroeconomic environment.

JELD-WEN Reports Q1 2024 Earnings: Misses Revenue Estimates and Lowers Full-Year ForecastsJELD-WEN Reports Q1 2024 Earnings: Misses Revenue Estimates and Lowers Full-Year Forecasts

JELD-WEN Reports Q1 2024 Earnings: Misses Revenue Estimates and Lowers Full-Year Forecasts

Informations about company

JELD-WEN operates primarily in North America, Europe and Australasia, focusing on door and window manufacturing. The company’s products are indispensable in both residential and non-residential construction. JELD-WEN’s activities are closely related to the global construction market, which significantly affects its operating results.

Financial results for the first quarter

Reported net revenues for the first quarter of 2024 were $959.1 million, down 11.2% from $1,080.5 million in the same period last year. This decline was primarily due to a 12% decline in core revenues, driven by a similar decline in volume/mix, which the company attributes to weakening macroeconomic conditions. The value of revenues did not meet the expectations of analysts who estimated revenues at approximately USD 964.55 million.

Net loss from continuing operations was pronounced at $27.7 million, or $(0.32) per share, a significant decline compared to net income of $8.5 million, or $0.10 per share, in Q1 2023 Adjusted EBITDA from continuing operations also saw a decline of $10.6 million to $68.7 million, with a slight decline in adjusted EBITDA margin of 10 basis points to 7.2%.

Segment performance and challenges

In North America, JELD-WEN’s largest market, net revenues declined 11.5% to $680.0 million, with net income declining $19.0 million year-over-year. The operating profit margin in this segment also decreased significantly from 7.0% to 2.9%. The European segment didn’t fare much better, seeing revenue decline 10.7% and net profit drop to zero compared to $7.3 million the previous year.

The company’s CEO, William J. Christensen, commented on the results, stating:

During the first quarter, despite the challenging demand environment, we made significant progress in streamlining operations and improving customer service. I am proud of how our associates have remained focused on meeting our customers’ expectations while working diligently to implement the necessary changes to repair our foundations.

Updated guidance for the full year 2024

Reflecting ongoing challenges, JELD-WEN revised its full-year revenue guidance to $3.9 to $4.1 billion, compared to the previous forecast of $4.0 to $4.3 billion. This adjustment is consistent with an expected 5% to 9% decline in core revenues. Adjusted EBITDA expectations for the year were also lowered to a range of $340 million to $380 million.

Financial situation and cash flow

Cash and cash equivalents as of March 30, 2024 were $234.5 million. Net cash used in operating activities increased to $11.0 million, compared to $0.7 million in the prior year, primarily due to lower net income and a decrease in accrued passive expenses. Capital expenditure increased to $34.7 million, reflecting ongoing investment in the company despite the difficult economic situation.

Application

JELD-WEN’s Q1 2024 results highlight the impact of unfavorable macroeconomic conditions on the construction sector. While the company is taking steps to streamline operations and improve the customer experience, the reduced guidance suggests challenges may persist throughout the year. Investors and interested parties will likely be watching closely to see how JELD-WEN navigates these headwinds in the coming quarters.

More details can be found in the full 8k earnings release. (here) of JELD-WEN Holding Inc.

This article first appeared on GuruFocus.