Eagle Materials' Q2 Revenue Up, Net Income Dips Amid Higher Costs

Ticker: EXP · Form: 10-Q · Filed: 2025-10-30T00:00:00.000Z

Sentiment: mixed

Topics: Construction Materials, Cement, Aggregates, Earnings Decline, Revenue Growth, Capital Expenditures, Share Repurchases

TL;DR

**EXP's revenue is up, but net income is down, signaling margin compression despite strategic acquisitions and heavy capital spending; watch those costs.**

AI Summary

EAGLE MATERIALS INC. (EXP) reported a mixed financial performance for the three and six months ended September 30, 2025. For the three months, revenue increased by 2.4% to $638.9 million from $623.6 million in the prior year, but net earnings decreased by 4.3% to $137.4 million from $143.5 million. Diluted EPS also saw a slight decline to $4.23 from $4.26. For the six months, revenue grew by 3.3% to $1.27 billion from $1.23 billion, yet net earnings fell by 6.0% to $260.7 million from $277.4 million, and diluted EPS decreased to $7.99 from $8.19. The company completed the acquisition of Bullskin Stone & Lime LLC for approximately $149.9 million on January 7, 2025, contributing $16.8 million in revenue and $4.4 million in operating earnings for the six months. Cash provided by operating activities decreased to $341.2 million for the six months, down from $365.9 million in the prior year, while additions to property, plant, and equipment significantly increased to $184.6 million from $99.6 million, indicating substantial capital expenditure. Share repurchases continued, with $167.7 million spent for the six months ended September 30, 2025.

Why It Matters

Eagle Materials' mixed results, with revenue growth but declining net income, signal potential margin pressures for investors. The significant increase in capital expenditures, up to $184.6 million, suggests strategic investments in property, plant, and equipment, which could drive future growth but also impact short-term profitability. The acquisition of Bullskin Stone & Lime LLC expands EXP's aggregates business into Western Pennsylvania, enhancing its competitive position in the construction materials sector. However, the decrease in cash from operations and net earnings, despite revenue growth, indicates challenges in cost management or pricing power, which could affect shareholder returns and employee incentives. The continued share repurchases, totaling $167.7 million, demonstrate a commitment to returning capital to shareholders, but this must be balanced against operational performance.

Risk Assessment

Risk Level: medium — The company experienced a 4.3% decrease in net earnings for the three months ended September 30, 2025, to $137.4 million, despite a 2.4% increase in revenue. This indicates potential margin erosion. Furthermore, cash provided by operating activities decreased by $24.7 million, from $365.9 million in 2024 to $341.2 million in 2025 for the six-month period, suggesting reduced operational efficiency or increased working capital needs.

Analyst Insight

Investors should closely monitor Eagle Materials' upcoming earnings calls for detailed explanations on cost drivers and margin trends. Consider if the increased capital expenditures and recent acquisition will yield sufficient returns to offset current profitability challenges. A wait-and-see approach is advisable until clearer signs of margin stabilization or improvement emerge.

Financial Highlights

revenue
$1.27B
total Assets
$3.41B
net Income
$260.7M
eps
$7.99
gross Margin
30.3%
cash Position
$35.0M
revenue Growth
+3.3%

Revenue Breakdown

SegmentRevenueGrowth
Total Revenue$638.9M+2.4%
Total Revenue$1.27B+3.3%

Key Numbers

Key Players & Entities

FAQ

What were Eagle Materials' revenues for the three and six months ended September 30, 2025?

For the three months ended September 30, 2025, Eagle Materials reported revenues of $638,906 thousand. For the six months ended September 30, 2025, revenues were $1,273,596 thousand.

How did Eagle Materials' net earnings change compared to the previous year?

Net earnings for the three months ended September 30, 2025, decreased to $137,383 thousand from $143,520 thousand in the prior year. For the six months, net earnings decreased to $260,745 thousand from $277,362 thousand in 2024.

What was the impact of the Bullskin Stone & Lime LLC acquisition on Eagle Materials' financials?

The acquisition of Bullskin Stone & Lime LLC for approximately $149.9 million contributed $9,602 thousand in revenue and $2,739 thousand in operating earnings for the three months ended September 30, 2025. For the six months, it added $16,804 thousand in revenue and $4,373 thousand in operating earnings.

What were Eagle Materials' cash flows from operating activities for the six months ended September 30, 2025?

Net cash provided by operating activities for the six months ended September 30, 2025, was $341,231 thousand, a decrease from $365,898 thousand in the same period of 2024.

How much did Eagle Materials spend on property, plant, and equipment additions?

Additions to property, plant, and equipment for the six months ended September 30, 2025, totaled $184,635 thousand, a significant increase from $99,605 thousand in the prior year.

What is the current outstanding share count for Eagle Materials?

As of October 27, 2025, the number of outstanding shares of common stock was 32,063,877.

What new accounting pronouncements is Eagle Materials evaluating?

Eagle Materials is evaluating ASU 2024-03, 'Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures,' which requires additional disclosures about certain key expense categories. It is effective for fiscal years beginning after December 15, 2026.

What are the primary sources of revenue for Eagle Materials?

Eagle Materials earns revenue primarily from the sale of products including cement, concrete, aggregates, gypsum wallboard, and recycled paperboard. Revenue from cement, concrete, aggregates, and gypsum wallboard is recognized upon shipment, while recycled paperboard revenue is mainly from long-term supply agreements.

What is Eagle Materials' strategy regarding share repurchases?

Eagle Materials continued its share repurchase program, spending $167,700 thousand on the purchase and retirement of common stock for the six months ended September 30, 2025, up from $146,176 thousand in the prior year.

What are the key risks identified in Eagle Materials' 10-Q filing?

While specific risk factors are not detailed in the provided excerpt, the decline in net earnings despite revenue growth and the decrease in cash from operating activities suggest risks related to cost management, market pricing, and operational efficiency. The increase in corporate general and administrative expense to $42,099 thousand for the six months also indicates rising overheads.

Risk Factors

Industry Context

Eagle Materials Inc. operates in the building materials sector, which is cyclical and closely tied to the health of the construction industry. Key segments include cement, concrete, and aggregates. The industry is characterized by significant capital investment, regional market dynamics, and sensitivity to economic cycles and interest rates.

Regulatory Implications

The company faces regulatory scrutiny related to environmental standards, mine safety, and general business practices. Compliance with these regulations is crucial to avoid fines, operational disruptions, and reputational damage. Changes in environmental policies could impact operational costs and investment decisions.

What Investors Should Do

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Key Dates

Glossary

Equity in Earnings of Unconsolidated Joint Venture
The portion of profit or loss from a joint venture that is not fully owned by the company, recognized on the income statement. (This line item shows the company's share of earnings from its joint venture investments, which decreased from $16.99 million in the prior year's six months to $10.11 million in the current period.)
Operating Lease Right-of-Use Assets
Assets recognized under accounting standards for leases, representing the right to use an asset for a specified period. (These assets increased slightly to $30.99 million as of September 30, 2025, indicating ongoing lease commitments.)
Goodwill and Intangible Assets, net
Represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations (goodwill) and other non-physical assets with determinable value. (These assets decreased from $595.75 million to $590.56 million, potentially due to amortization or impairments.)
Weighted-Average Shares Outstanding (Diluted)
The average number of outstanding shares of common stock, adjusted for the dilutive effect of stock options, warrants, and convertible securities. (Diluted EPS is calculated using these shares. The number of diluted shares outstanding decreased from 33.85 million in the prior year's six months to 32.64 million in the current period.)
Comprehensive Earnings
Includes net earnings plus other gains and losses that are not included in net earnings, such as unrealized gains or losses on certain investments and foreign currency translation adjustments. (For the six months ended September 30, 2025, comprehensive earnings were $260.83 million, slightly higher than net earnings due to minor adjustments.)

Year-Over-Year Comparison

Compared to the prior year, Eagle Materials Inc. reported increased revenue for both the three-month ($638.9M vs $623.6M) and six-month ($1.27B vs $1.23B) periods ended September 30, 2025. However, net earnings and diluted EPS have declined in both periods, suggesting margin compression or increased operating costs. Significant increases in capital expenditures and continued share repurchases are notable uses of cash, while cash from operations has seen a slight decrease.

Filing Stats: 4,377 words · 18 min read · ~15 pages · Grade level 15.9 · Accepted 2025-10-30 16:30:56

Filing Documents

FINANCIAL INFORMATION (UNAUDITED)

PART I. FINANCIAL INFORMATION (UNAUDITED) Page Item 1. Consolidated Financial Statements Consolidated Statements of Earnings for the Three and Six Months Ended September 30, 2025 and 2024 1 Consolidated Statements of Comprehensive Earnings for the Three and Six Months Ended September 30, 2025 and 2024 2 Consolidated Balance Sheets as of September 30, 2025, and March 31, 2025 3 Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2025 and 2024 4 Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended September 30, 2025 and 20 24 5 Notes to Unaudited Consolidated Financial Statements 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 44 Item 4.

Controls and Procedures

Controls and Procedures 44

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 45 Item 1a.

Risk Factors

Risk Factors 45 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45 Item 4. Mine Safety Disclosures 45 Item 5. Other Information 45 Item 6. Exhibits 46

SIGNATURES

SIGNATURES 47

FINANCIAL INFORMATION (UNAUDITED)

PART I. FINANCIAL INFORMATION (UNAUDITED)

Consolidated Financial Statements

Item 1. Consolidated Financial Statements EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) For the Three Months Ended September 30, For the Six Months Ended September 30, 2025 2024 2025 2024 (dollars in thousands, except share and per share data) (dollars in thousands, except share and per share data) Revenue $ 638,906 $ 623,619 $ 1,273,596 $ 1,232,308 Cost of Goods Sold 439,194 419,775 888,285 841,596 Gross Profit 199,712 203,844 385,311 390,712 Equity in Earnings of Unconsolidated Joint Venture 6,309 9,276 10,113 16,992 Corporate General and Administrative Expense ( 21,316 ) ( 17,879 ) ( 42,099 ) ( 33,528 ) Other Non-Operating Income 1,131 724 2,085 3,407 Interest Expense, net ( 9,362 ) ( 10,714 ) ( 21,078 ) ( 21,398 ) Earnings Before Income Taxes 176,474 185,251 334,332 356,185 Income Taxes ( 39,091 ) ( 41,731 ) ( 73,587 ) ( 78,823 ) Net Earnings $ 137,383 $ 143,520 $ 260,745 $ 277,362 EARNINGS PER SHARE Basic $ 4.25 $ 4.29 $ 8.03 $ 8.26 Diluted 4.23 4.26 7.99 8.19 WEIGHTED-AVERAGE SHARES OUTSTANDING Basic 32,297,313 33,431,315 32,459,801 33,581,970 Diluted 32,469,833 33,716,036 32,638,307 33,853,703 CASH DIVIDENDS PER SHARE $ 0.25 $ 0.25 $ 0.50 $ 0.50 See Notes to Unaudited Consolidated Financial Statements. 1 EAGLE MATERIALS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (unaudited) For the Three Months Ended September 30, For the Six Months Ended September 30, 2025 2024 2025 2024 (dollars in thousands) (dollars in thousands) Net Earnings $ 137,383 $ 143,520 $ 260,745 $ 277,362 Net Actuarial Change in Defined Benefit Plans: Amortization of Net Actuarial Loss 53 60 106 120 Tax Expense ( 12 ) ( 15 ) ( 24 ) ( 30

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