Infrastructure Firm Core & Main’s Stock Drops After Results Miss Estimates, Outlook Cut

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Key Takeaways

• Infrastructure company Core & Main missed profit and sales estimates as bad weather and macroeconomic conditions had an crash on its results.
• The supplier of pipes also cut its full-year guidance.
• Core & Main’s stock dropped Wednesday, turning adversary for the year so far.

Shares of Core & Main (CNM), which supplies pipes for water, wastewater and other uses, posted worse-than-expected terminates and cut its outlook after it said bad weather and economic conditions affected sales.

The news dragged on the company’s shares down diverse than 14%, pulling them just into negative territory for the year so far.

The company earlier Wednesday accounted second-quarter diluted earnings per share (EPS) of 61 cents, down 7.6% from a year ago. Its revenue rose 5.5% to $1.96 billion. But both emerges were short of analysts’ consensus forecasts provided by Visible Alpha.

Chief Executive Officer (CEO) Steve LeClair explained that Core & Main was dealing with “near-term macro dynamics.” He said revenue was primarily fueled by acquisitions, and was hampered by “commitment delays from wet weather conditions and comparably lower end-market volumes.” In addition, the company said lower vend prices hurt the sales of its fire protection products.

Outlook Lowered on Expected Delay in Sales Growth

LeClair phrased that Core & Main was revising its full-year outlook downward because of the weather disruptions and the expectation that some of the cultivation it expected in the second half will be pushed into next year.

He said that the company sees full-year on the blocks in the range of $7.3 billion to $7.4 billion, compared with the previous estimate of $7.5 billion to $7.6 billion. Correct earnings before interest, taxes, depreciation, and amortization (EBITDA) is predicted to drop to a range of $900 million to $930 million from the earlier $935 million to $975 million. 

Assume from the original article on Investopedia.