HARTFORD, Conn. (AP) ¿ Housing construction is picking up and demand is expected to rise for products from Beacon Roofing Supply Inc., an analyst said as he raised his rating on the company.
Analyst Jeffrey Germanotta of William Blair & Co. upgraded Beacon roofing to "Outperform" from "Market Perform" on Tuesday as the company reported lower fourth-quarter earnings that still exceeded Wall Street's expectations.
Demand should improve for Beacon Roofing products in the second half of 2010, new housing construction and work on deferred maintenance will likely pick up in the spring and acquisitions should begin again next year, Germanotta said in a client note.
However, profitability in the short run will be hampered by seasonally weak demand at the end of the year and early 2010, he said.Beacon Roofing, based in Peabody, Mass., reported that it earned $19.3 million, or 42 cents per share, down 23 percent from $24.9 million, or 55 cents per share in the same quarter last year. Revenue for the quarter ended Sept. 30 was $487.7 million, down 14 percent from $567.2 million in the year-ago quarter. Analysts surveyed by Thomson Reuters expected earnings of 38 cents per share on revenue of $489.2 million. The estimates typically exclude one-time items. For the full year, Beacon Roofing earned $52.4 million, or $1.15 per share, up from $40.3 million, or 90 cents per share, a year earlier. Annual revenue slipped to $1.73 billion from $1.78 billion in fiscal 2008. Analysts expected earnings of $1.12 per share on revenue of $1.73 billion, according to a survey by Thomson Reuters.