As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at building materials stocks, starting with Armstrong World (NYSE: AWI).

Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.

The 8 building materials stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1.1% below.

While some building materials stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.8% since the latest earnings results.

Armstrong World (NYSE: AWI)

Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.

Armstrong World reported revenues of $425.2 million, up 10% year on year. This print exceeded analysts’ expectations by 0.8%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ revenue estimates but a miss of analysts’ adjusted operating income estimates.

“Today we announced record-setting, third-quarter net sales and earnings with strong Mineral Fiber Average Unit Value (AUV) performance, a second consecutive quarter of Mineral Fiber volume growth, and double-digit net sales growth in Architectural Specialties. These results were driven by solid operational and commercial execution across our enterprise that allowed us to overcome lingering market softness and some timing-related cost headwinds,” said AWI President and CEO, Vic Grizzle.

The stock is down 6.6% since reporting and currently trades at $189.27.

Is now the time to buy Armstrong World? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Carlisle (NYSE: CSL)

Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE: CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.

Carlisle reported revenues of $1.35 billion, flat year on year, outperforming analysts’ expectations by 1.2%. The business had a very strong quarter with a solid beat of analysts’ adjusted operating income and organic revenue estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3.9% since reporting. It currently trades at $318.34.

Is now the time to buy Carlisle? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Tecnoglass (NYSE: TGLS)

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Tecnoglass reported revenues of $260.5 million, up 9.3% year on year, falling short of analysts’ expectations by 2.1%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations.

As expected, the stock is down 10.3% since the results and currently trades at $50.25.

Read our full analysis of Tecnoglass’s results here.

Sherwin-Williams (NYSE: SHW)

Widely known for its success in the paint industry, Sherwin-Williams (NYSE: SHW) is a manufacturer of paints, coatings, and related products.

Sherwin-Williams reported revenues of $6.36 billion, up 3.2% year on year. This number topped analysts’ expectations by 2.6%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ revenue estimates.

Sherwin-Williams delivered the biggest analyst estimates beat among its peers. The stock is flat since reporting and currently trades at $341.41.

Read our full, actionable report on Sherwin-Williams here, it’s free for active Edge members.

UFP Industries (NASDAQ: UFPI)

Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.

UFP Industries reported revenues of $1.56 billion, down 5.4% year on year. This result missed analysts’ expectations by 3.2%. It was a disappointing quarter as it also logged a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

UFP Industries had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 1.8% since reporting and currently trades at $91.66.

Read our full, actionable report on UFP Industries here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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