The company now sees revenue of $78 million for its fiscal second quarter ended in June, more than 30% below its previous forecast of $115 million.
Trex, whose products typically cost more than using wood but require less maintenance, cited poor weather and weak economic conditions for the view, which is also well below Wall Street's current consensus estimate for revenue of $113.9 million.
"Sales did not materialize as expected during the second quarter. Poor weather and, to a lesser extent, the unfavorable macroeconomic environment, caused the lower-than-expected revenue performance," said Ronald Kaplan, the company's president, chairman and CEO in a press release. "Many parts of the country experienced major winter storms through April, which were then followed by heavier-than-normal precipitation during most of May, further delaying the start of the decking season."The stock was recently trading down 14.3% at $20.54 on volume of more than 1 million, which is more than six times the issue's trailing three-month daily average of around 145,000. Trex didn't provide an earnings view for the quarter. The average estimate of analysts polled by Thomson Reuters is for a profit of 86 cents a share in the June period. The warning is particularly devastating because the calendar second quarter was projected to be Trex's best of the year, by far, with spring considered prime deck-building season. The consensus estimate for its full-year earnings is for a profit of $1.48 per share, meaning the second-quarter view represents more than half of earnings seen for all of 2011. In 2010, Trex delivered a second-quarter profit of $1.07 a share on revenue of $115.5 million. Trex sewed some seeds for optimism, however, in its release, saying sales order activity in June was 15% ahead of last year as weather improved and that July was running ahead of a year ago as well. The company is slated to deliver its full second-quarter results on Aug. 1.
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