Stella-Jones ( (STLJF) ) has released its Q3 earnings. Here is a breakdown of the information Stella-Jones presented to its investors.
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Stella-Jones Inc. is a leading North American manufacturer of pressure-treated wood products, primarily serving the infrastructure sector for electrical utilities and railway systems.
In the third quarter of 2024, Stella-Jones reported sales of $915 million, a decrease from the previous year’s $949 million, while maintaining a solid EBITDA margin of 17.7%. The company updated its financial objectives for 2023-2025 to reflect a projected sales target of approximately $3.6 billion and an EBITDA margin exceeding 17% by 2025.
The company’s sales decline was attributed to lower volumes in all product categories, impacted by economic factors such as inflation and supply chain constraints affecting utility purchases. Despite this, utility poles, which make up a significant portion of sales, saw some growth due to higher pricing. Net income for the quarter stood at $80 million, down from $110 million in the same period last year.
Stella-Jones continues to leverage its strong balance sheet, robust capacity, and secured long-term sales contracts with utility customers, indicating confidence in sustained demand. The company announced a new share repurchase plan for 2024-2025, reflecting its cash-generative business model.
Looking ahead, Stella-Jones is optimistic about its growth prospects, supported by ongoing infrastructure investments by utilities and a strong market position, despite the challenges faced in the current economic landscape.
