How Will NCI Bulding System (NCS) Stock Be Affected By Its Earnings Results?

NEW YORK (TheStreet) -- NCI Building Systems (NCS) shares are flat in after-hours trading following the release of the company's second quarter earnings results.

The company reported a 4.2% year over year revenue increase to $305.8 million, below analysts consensus $312.4 million estimate.

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Earnings per share for the quarter were -7 cents per diluted share, 4 cents worse than what analyst had expected.

The company blamed the lackluster quarter on adverse weather conditions and spending on growth initiatives.

TheStreet Ratings team rates NCI BUILDING SYSTEMS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate NCI BUILDING SYSTEMS INC (NCS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NCS's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for NCI BUILDING SYSTEMS INC is rather low; currently it is at 21.57%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.37% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$33.98 million or 157.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: NCS Ratings Report
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