Arcosa (ACA) Tops Q1 EPS by 25c; Reaffirms

Arcosa (NYSE: ACA) reported Q1 EPS of $0.58, $0.25 better than the analyst estimate of $0.33. Revenue for the quarter came in at $410.9 million versus the consensus estimate of $391.2 million.

“Arcosa’s first quarter results were better than our expectations,” said Antonio Carrillo, President and Chief Executive Officer. “This strong start to 2019 supports our confidence in our full year guidance.

“We achieved year-over-year revenue growth in each of our business segments, benefitting from organic initiatives and the addition of ACG Materials, which we acquired in December 2018.

“First quarter adjusted EBITDA growth outpaced revenue gains, despite start-up expenses of $1.8 million related to the re-opening of our Madisonville, Louisiana barge facility, lost production at our Caruthersville, Missouri barge facility due to flooding, and inefficiencies at all of our barge plants as we ramped up production. Adjusted EBITDA margin expansion was driven by strong margin improvements in Energy Equipment from increased throughput, improved operating efficiencies, and the fourth quarter 2018 divestitures of several businesses. Additionally, Energy Equipment margins benefitted from the partial recovery of a previously recorded bad debt expense.

“The integration of the ACG Materials acquisition into our Construction Products Group is also proceeding well. ACG\'s first quarter results were in line with our expectations, and we continue to consider bolt-on acquisitions in the aggregates and specialty materials markets.

“First quarter order activity remained strong. Our barge business continued to build backlog, primarily for liquid tank barges, which has firmed up our production schedule for 2019 and has given us considerable early backlog for 2020. This was an exceptionally high quarter of orders with a book to bill of 4.1 that reflected solid demand and the finalization of several large orders that had been in the pipeline for months. We remain encouraged by inquiry levels in both the dry and liquid markets.

“In the Energy Equipment segment, bidding activity remains strong in our utility structures business with first quarter order levels increasing sequentially. However, we expect lower second quarter performance driven by a less favorable product mix from several customer projects that were delayed beyond the quarter,” noted Mr. Carrillo.

“We continued to execute effectively on our stage one priorities: growing Construction Products, improving margins in Energy Equipment, expanding our Transportation Products business as markets continue to recover, and operating a lean corporate structure.

“Our strong start to the year and confidence in current business trends support our expectations for substantial growth in 2019. We reaffirm our full year revenue and adjusted EBITDA guidance ranges of $1.70 billion to $1.80 billion and $215 million to $225 million, respectively. The mid-point represents 18% year-over-year adjusted EBITDA growth in 2019, after absorbing additional standalone company costs and initial pricing on a long-term components contract,” Mr. Carrillo noted.

For earnings history and earnings-related data on Arcosa (ACA) click here.

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