BMC Stock Holdings Inc., a Raleigh-based construction supply company, exceeded analyst expectations with a $17.4 million increase in net income for the third quarter, causing its stock price to rise 7 percent.
The company reported an adjusted net income of $35.9 million, or 58 cents per share, for the quarter, up from earnings of 34 cents per share this time last year. The results exceeded the 50 cents per share that analysts expected.
The increase was due to a 12.4 percent rise in net sales to $990.3 million.
President and CEO Dave Flitman said the company owes the strong results to growth in key product categories.
“Our team has demonstrated outstanding execution of our strategy this year, focusing on service levels, driving productivity improvements and providing innovative solutions to our customers,” Flitman said in a statement.
“Contributing to the success this quarter was strong growth in our value-added product categories of structural components, which grew 15 percent, and millwork, doors and windows, which grew 11.4 percent.”
The company said net sales increased due to several other factors including a 6.3 percent increase in selling prices of lumber and lumber sheet goods, 4 percent from organic growth and 2.1 percent from the acquisition of W.E. Shone Co.
BMC also estimates that net sales to single-family homebuilders increased 13 percent, net sales to remodeling contractors increased 15.1 percent and net sales to multi-family, commercial and other contractors increased 7 percent.
Flitman said the company has continued to grow despite decreased housing starts.
“While affordability concerns have caused a recent deceleration in housing starts growth, the longer-term fundamentals underlying the housing market remain favorable, including household formation, demographic trends, job growth and higher wages,” Flitman said in a statement.
As of market close on Thursday, BMC was trading at $17.91 per share, an increase of $1.17, or 6.99 percent.
Raleigh-based BMC is a provider of building services and supplies that include millwork and structural component manufacturing capabilities. BMC serves 45 metropolitan areas across 19 states, principally in the South and West.
