UPDATE 2-Trex Q2 profit triples, sees Q3 sales above Street view
(Recasts; adds analyst's comments; updates share movement)
July 30 (Reuters) - Deckings and railings maker Trex Co Inc (TWP.N: Quote, Profile, Research) reported a three-fold rise in quarterly profit, helped in part by a tax gain, and it forecast third-quarter sales above market estimates, sending shares up about 27 percent.
"While sales in the quarter were better than our estimates, their margin was also significantly better," BB&T Capital Markets analyst John Kasprzak said by phone. "So, there was upside in both areas."
For the second quarter, net income was $7.9 million, or 52 cents a share, compared with $2.6 million, or 17 cents a share, a year earlier.
Analysts on average were expecting earnings of 18 cents a share, excluding items, according to Reuters Estimates.
Net sales fell 20 percent to $95 million, but were still above the consensus estimate of $87.8 million.
The company said its effective tax rate for the quarter was negligible, as it recognized a decrease in the valuation allowance against the deferred tax asset, which boosted earnings by 16 cents a share.
Kasprzak said the company's capacity utilisation, which was just under 50 percent, played an integral role in boosting quarterly performance.
Trex also forecast third-quarter sales of between $90 million and $97 million, while consensus estimate is $68.5 million. Continued...
REUTERS WEEKEND
Pledge to support economies
G20 financial leaders pledged to prepare strategies to end emergency support for their economies, but to keep the aid flowing until recovery was assured. Full Article | Related Story












