Builders FirstSource popped 5% in early trade Thursday, aiming shares toward new highs. The company reported an unexpectedly strong fourth-quarter and lifted its current share buyback initiative by $800 million.
The Dallas-based outfit is a full-service building supplier, handling project-scale orders from contractors as well as selling screws, nails, tools and other basic jobsite supplies.
Builders reported a 10% earnings increase to $3.55 a share vs. consensus expectations for a 20% decline. Revenue also came in above forecast at $4.15 billion vs. views for $4.03 billion.
Builders has been buckling down on its execution, stepping up its market share by tightening relationships with contractors and working through supply-chain hitches. The strategy paid off in a year when single family home starts slipped.
Official Commerce Department data released Feb. 16 showed privately owned housing starts in January slowed to a seasonally adjusted annual rate of 1.331 million. That was down almost 15% from December, and not quite 1% below the January 2023 rate of 1.340 million.
That put starts more than 26% below their April 2022 peak.
Builders announced separately it had boosted the $200 million remaining on its April 2023 stock buyback initiative, raising that to $1 billion. It reported purchasing 17.8 million shares in 2023, for a total purchase cost of $1.8 billion. The buyback program initiated in August 2021, the company has bought back more than 87 million shares — 42.2% of its total shares outstanding.
Long-term debt, including current maturities, stood at $3.181 billion, about 6% above the December 2022 level.
Builders FirstSource shares pared early gains in pre-opening trade on the stock market today. The stock is up 17% from a mid-December breakout. A move above $188.22 would put shares past the 20% profit-taking threshold.
