Eagle Materials Inc. announced financial results for the first quarter of fiscal year 2027 ended June 30, reporting record revenue of $651 million, up 3%.
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, Joint Venture and intersegment Cement revenue, increased 8% to $454.1 million, primarily driven by higher Cement sales volume. Heavy Materials operating earnings decreased 11% to $77.6 million primarily because of higher Cement operating costs.
Cement revenue, including Joint Venture and intersegment revenue, was up 9% to $377.9 million. Operating earnings decreased 9% to $73.6 million, because of higher Cement operating costs partially offset by higher Cement sales volume.
Cement operating costs were affected by higher maintenance and raw materials costs — and inefficiencies associated with unexpected downtime at the company’s Mountain Cement facility — of $7.4 million, $4.2 million and $6 million, respectively, partially offset by lower energy costs of $1.6 million.
The average gross Cement sales price was up 1% while the average net Cement sales price decreased 2% as a result of higher freight costs of $3 per ton. Cement sales volume increased 8% to a record 2.1 million tons.
Concrete and Aggregates revenue was up 3% to $76.2 million, driven by higher Aggregates sales volume and prices. Operating earnings were down 35% to $4 million, reflecting lower Concrete sales volume and higher operating costs.
Revenue in the Light Materials sector, which includes Gypsum Wallboard and Recycled Paperboard, decreased 5% to $238.2 million, primarily because of lower Gypsum Wallboard sales volume and net prices. Gypsum Wallboard sales volume decreased 2% to 772 million sq.ft.feet (MMSF) reflecting continued softness in residential construction. The average gross wallboard price was down 5% from the prior year and flat with the sequential quarter, while the average net sales price declined 10% from the prior year, reflecting higher freight costs.
Recycled Paperboard sales volume was a record 92,000 tons, up 2% from the prior year. The average Recycled Paperboard net sales price in the quarter was $600.44 per ton, up 6%, consistent with the pricing provisions in our long-term sales agreements that factor in changes to input costs.
Operating earnings in the Light Materials sector were $86.5 million, down 15%, reflecting lower Gypsum Wallboard earnings, partially offset by higher Recycled Paperboard earnings.
Commenting on the first quarter results, Michael Haack, president and chief executive officer, said, “Eagle delivered a solid start to fiscal 2027, despite ongoing geopolitical, trade and fiscal policy uncertainty, our diversified portfolio of businesses continued to perform well, supported by resilient end markets. Our Cement sales volume increased 8%, driven by sustained strength in public construction activity and large private non-residential projects.
“The growth in our cement sales volume was offset by an approximately $6 million earnings impact resulting from an unexpected equipment failure at our Mountain Cement facility. This equipment failure did not affect the ongoing modernization project. and we expect to recover a portion of this impact through our insurance coverage. Importantly, we utilized our network of cement plants to continue meeting customer demand without interruption.
“This incident further underscores the importance of our Mountain Cement modernization investment, which is intended to enhance the facility’s long-term reliability and operational performance. Our Wallboard sales volume experienced only a slight decline despite continued softness in residential construction activity. Additionally, we incurred higher delivery costs across our Cement and Wallboard businesses, primarily driven by elevated diesel prices during the quarter.”
Haack continued, “In the midst of this ongoing volatility, we remained focused on investing in our plant network and advancing our commitment to employee health and safety while continuing to return capital to shareholders. During the quarter, we made meaningful progress on the modernizations of our Laramie, Wyoming Cement and our Duke, Oklahoma Gypsum Wallboard plants — investments that will further strengthen our competitive position. We also repurchased 406,500 shares of our common stock for approximately $84 million.
“We ended the quarter with debt of $1.8 billion, net debt of $1.5 billion, and a net leverage ratio (net debt to Adjusted EBITDA) of 2.1x, providing substantial financial flexibility to support our disciplined capital allocation strategy and long-term growth.”
Haack concluded, “We have a long history of successfully navigating dynamic market environments. While fuel cost pressures weighed on profitability in the past quarter, our favorable market positions, strong balance sheet, and continued disciplined investment in our people and assets, position us to deliver solid performance as market conditions evolve and to create value for our shareholders over the long term.”
