Smith-Midland Q3 Earnings Skyrocket 146% Y/Y, Revenues Soar 51%

Shares of Smith-Midland Corporation SMID have risen 16.1% since the company reported its earnings for the third quarter of 2024. This compares with the S&P 500 index’s 2% decline over the same time frame. Over the past month, the stock has gained 31.7% versus the S&P 500’s 0.7% rise.Financial Highlights & ComparisonSmith-Midland reported a 51% jump in third-quarter 2024 revenues to $23.6 million from $15.7 million in the prior-year quarter.The company registered earnings per diluted share of 59 cents, up from 24 cents in the prior-year quarter.The quarterly results were primarily driven by higher revenues from service segments, which include barrier rentals, royalty income, and shipping and installation, an improved gross margin due to a favorable product mix, and better fixed-cost absorption.Other Key Business MetricsService Revenues SurgeService revenues skyrocketed 170% year over year to $12.8 million in the third quarter of 2024, fueled by an increase in barrier rental revenues to $7.1 million from $784,000 in third-quarter 2023. Shipping and installation revenue rose 53% year over year, reaching $4.8 million in the third quarter of 2024, supported by higher volumes of SlenderWall and architectural panels. Royalty income also increased 16.5% year over year, reflecting greater barrier production by licensees.Product Sales InsightsWhile total product sales were $10.8 million in the third quarter of 2024 compared with $10.9 million in the prior-year quarter, certain segments saw strong growth. Utility sales more than doubled to $2.4 million, bolstered by demand for data center utility vaults. Architectural wall sales quintupled to $1.6 million in the reported quarter. However, barrier sales declined 61.5% year over year to $546,000 in the third quarter of 2024, in line with the company’s strategic pivot to rentals.Margins & EfficiencyThe gross margin improved to 27.9% in the third quarter of 2024 from 22.9% in the prior-year quarter, supported by better fixed-cost absorption and favorable margins from special barrier projects.The company's gross profit rose to $6.6 million in the third quarter of 2024 from $3.6 million in the prior-year quarter, driven by higher service revenues and an improved product mix. Operating income surged to $3.8 million in the third quarter of 2024 from $1.5 million in the year-ago quarter.Management CommentaryCEO Ashley Smith highlighted record revenues and net income as a testament to strong sector tailwinds and the company’s focus on high-margin projects. Smith also pointed to the Infrastructure Investment and Jobs Act as a demand driver for products like utility vaults and barrier systems. The company’s shift to barrier rentals appears well-timed, leveraging higher recurring revenues from special projects.Guidance & OutlookSmith-Midland expects continued growth into 2025, supported by a robust $62.8 million backlog as of Nov. 1, 2024, up from $60.2 million a year ago. Management anticipates fulfilling most of the backlog within 12 months while navigating the impacts of inflationary pressures on labor and material costs.Other DevelopmentsIn the third quarter of 2024, the company was awarded a provisional patent and crash-tested the J-J Hook MASH 16 Low-Profile Barrier, a milestone reinforcing its innovation pipeline. Capital expenditure was $2 million for the quarter, primarily allocated to expanding production capacity at its facilities.Smith-Midland’s strategic pivot and operational efficiency have positioned it to capitalize on infrastructure growth, setting the stage for sustained shareholder value creation.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Smith-Midland Corp. (SMID): Get Free ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks