Eagle Materials Inc today reported financial results for the third quarter of fiscal 2007 ended December 31, 2006 and issued guidance for the fourth quarter of its fiscal year 2007.
For the quarter ended December 31, 2006, revenues and net earnings were $214.2 million and $40.9 million, respectively. Revenues increased 1% over the prior year third quarter and net earnings increased 5% over the same period.
While total U.S. construction spending remains strong, the severe slowdown in residential construction continues to negatively impact sales prices and volumes in the wallboard industry. The Gypsum Association reported approximately 35.0 billion square feet of wallboard was shipped by U.S. manufacturers during calendar 2006, a 3% decrease over the prior year, while industry shipments for the quarter ended December 31, 2006 were down 16% to approximately 7.6 billion square feet compared to the same period a year ago. For calendar 2007, we expect wallboard industry capacity utilization to continue to decline and average utilization to range between 80% and 85%.
National demand for cement remains at a record high level with imports of approximately 30% required to meet U.S. construction industry demand. Demand in all four of Eagle Materials’ cement markets remains at high levels. High cost imports and high levels of U.S. cement demand continue to put upward pressure on cement pricing. Our third quarter pricing was the highest in Eagle’s history. While pricing remains strong, poor weather in certain of our markets has delayed previously announced cement price increases.
Operating earnings from Cement decreased 17% to $16.6 million for the third quarter this year from $20.1 million for the same quarter last year. This quarter’s Cement operating earnings were negatively impacted by approximately $8.5 million related to the shutdown required to tie in the new equipment at our Illinois Cement plant. The startup of our modernized Illinois Cement facility occurred in late December 2006, and it is now fully operational. Cement revenues, including joint venture and intersegment revenues, for the third quarter totaled $77.7 million, 17% greater than the $66.5 million for the same quarter a year ago. Cement sales volume for the third quarter totaled 779,000 tons, 5% above the 746,000 tons for the same quarter last year. To meet these strong market requirements, Eagle supplemented approximately 31% of its cement sales volume with lower margin purchased cement. The average net sales price for this fiscal year’s third quarter was $93.81 per ton, 13% greater than the $83.24 per ton for the same quarter last year.