Builders FirstSource rises on earnings beat, stock buybacks

Builders FirstSource (NYSE:BLDR) rose 5.8% in premarket trading Thursday after the supplier of building materials reported quarterly results and expanded its stock buyback plan.

For the fourth quarter, net income was $350.7 million, or $2.83 a share, compared with $384.5 million, or $2.62 a share, a year earlier.

Earnings adjusted for one-time items were $3.55 a share, beating the average estimate of $2.58 a share among Wall Street analysts.

Sales fell 4.7% from a year earlier to $4.2 billion in the three-month period through December, compared with the consensus estimate of $4.03 billion.

Adjusted earnings before interest, taxes, depreciation and amortization margin increased 50 basis points from the prior year period to 16.5%.

“Despite a challenging operating environment in 2023, which saw a significant reduction in single-family starts, we delivered a high-teens ebitda margin,” Dave Rush, chief executive of Builders FirstSource (BLDR), said in a statement.

Management forecast sales of $17.5 billion to $18.5 billion for full-year 2024, compared with the consensus estimate of $17.6 billion.

In the regions where Builders FirstSource (BLDR) operates, single-family housing starts are projected to rise by a mid-single-digit percentage, while repair and replace activity is estimated to rise by a low-single-digit percentage. Multifamily starts are expected to decline 20% to 30%, the company said.

The company’s board authorized the repurchase of $1 billion in shares, which includes $200 million from its prior buyback plan. In 2023, it bought 17.8 million shares at an average price of $100.49 a share for a total amount of $1.8 billion including taxes and fees.

Bank of America last month upgraded Builders FirstSource (BLDR) on the likelihood of higher profits as more single-family homes are built.