TREX - Trex Company stock drops after downbeat 2022 guidance despite Q2 beat

Trex Company ( NYSE: TREX ) shares dipped 11.1% in Monday after-hours trading after the building products firm guided for less capex in 2022 due to an abrupt slump in pro-channel demand during the second quarter.

The poor outlook comes as "our partners began to adjust their inventory levels to align with expectations for an economic slowdown," said CEO and President Bryan Fairbanks.

Fairbanks said his company has revised its full-year capital expenditure spending to $170M-180M vs. its previous target of $200M-220M.

Also, "we anticipate the inventory adjustments being made in our channel will primarily impact this year’s third and fourth quarter revenues, which we expect to range from $185 million to $195 million, and $180 million to $190 million, respectively. We expect EBITDA margin of 27% to 29% for full year 2022," Fairbanks warned.

Turning to second-quarter results, though, adjusted EPS of $0.79 exceeded the average analyst estimate of $0.67 and climbed from $0.53 in the year-ago period.

Revenue of $386.2M also topped the consensus of $380.2M at the end of June and rose from $311.6M at June 30, 2021.

Income from operations for Q2 was $117.8M, up from $82.4M in Q2 of last year.

Q2 EBITDA came in at $129.1M vs. $91.6M in Q2 2021. Q2 EBITDA margin of 33.4% perked up from 29.4% a year ago.

Earlier, Trex Q2 GAAP EPS of $0.79 beats by $0.11 .

For further details see: