The Quarter That Was
There was no logical reason to think that Texas Industries would have a strong fiscal quarter and the company did not by general standards. This is a case, though, where investors might want to look a little more carefully, and doing so shows a better picture. True, revenue growth of 4% is not going to make anybody forget about Apple, but 4% growth in this housing/construction environment is a pretty good result. That's all the more relevant, given that the company also surpassed the average topline estimate for the quarter by about 5%.
Cement revenue was flat, as an increase in shipments offset a decrease in prices, while aggregates posted low-teens growth on a strong improvement in shipped volumes. Consumer sales were up 4% as a double-digit increase in shipments was offset by a nearly double-digit decrease in realized prices. (For more, see Opportunities In Cement.)
Profitability is not quite as good now, though. Gross profit fell 28% from the year-ago level and only the aggregates business showed improvement (and aggregates happen to be the most profitable from a gross margin perspective). Operating loss expanded from the year-ago level, but the company did have positive operating cash flow for the first half of its fiscal year and nearly cleared its maintenance cap-ex needs.
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