Eagle Materials announced financial results for the second quarter of fiscal year 2027 ended Sept. 30, reporting record revenue of $652.7 million and net earnings of $111.5 million.
Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, Joint Venture and intersegment Cement revenue, increased 2% to $477.8 million. Heavy Materials operating earnings declined 12% to $113 million, reflecting higher operating costs in both Cement and Concrete and Aggregates.
Cement revenue for the quarter, including Joint Venture and intersegment revenue, increased 1% to $390.5 million, while operating earnings were down 9% to $108.8 million.
The decline in earnings was due to higher fixed costs, including labor and depreciation, increased purchased raw material costs, and higher freight expenses driven primarily by rising diesel fuel prices.
The average gross Cement sales price increased 1%, while the average net sales price declined slightly to $154.58 per ton as a result of higher freight costs. Cement sales volume increased slightly to a record 2.2 million tons.
Concrete and Aggregates revenue was up 7% to $87.2 million, while operating earnings declined 47% to $4.2 million, reflecting higher maintenance, diesel and production costs. Aggregates sales volume was down 6% to 1.9 million tons.
Commenting on the second-quarter results, Michael Haack, president and chief executive officer, said, “Eagle’s businesses continued to perform well during the quarter despite a challenging operating environment characterized by elevated diesel fuel prices and higher interest rates driven by ongoing macroeconomic and geopolitical uncertainty. While spending on public infrastructure and large private non-residential construction projects continued to support demand for our Heavy Materials products, elevated interest rates placed additional pressure on an already challenging residential construction market. At the same time, higher diesel fuel prices increased transportation costs across all our business lines. Against this backdrop, our teams remained focused on employee safety, operational execution, serving our customers, and disciplined capital allocation.
“During the first half of our fiscal year, we continued to invest in our businesses while returning capital to shareholders. We continued to progress on the modernizations of our Mountain Cement and Duke, Oklahoma Gypsum Wallboard facilities, investments that should deliver meaningful financial and strategic benefits, including strengthening our low-cost operating position, enhancing each plant’s reliability and efficiency, and increasing our production capacity. We also repurchased 711,381 shares of our common stock for approximately $146.0 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.” (Net debt is a non-GAAP financial measure calculated by subtracting cash and cash equivalents from debt.)
Haack concluded, “While higher interest rates, broader economic uncertainty, and evolving geopolitical conditions may continue to affect construction activity in the near term, we remain focused on the factors within our control. Our businesses are operating well, and our favorable market positions, low-cost operations, financial flexibility, and continued disciplined investments in our people and operations position Eagle to navigate changing market conditions and create value for shareholders over the long term.”
