Eagle Materials Q4 Earnings Call Highlights

Key Points

• Record fiscal 2026 revenue hit $2.3 billion, the company’s fifth straight year of record sales, as stronger cement and aggregates performance offset weakness in wallboard. Full-year EPS was $13.16, while annual revenue rose 2% and Q4 revenue reached a record $479 million.
• Heavy Materials outperformed thanks to infrastructure spending, data centers, and acquired aggregates operations, with Heavy Materials revenue up 10% and aggregates sales volume reaching a record 6.6 million tons. Management also said cement price increases took effect in April in most markets, though freight costs will partially offset the benefit.
• Wallboard remained under pressure from soft residential construction, with Light Materials revenue falling 9% and operating earnings down 15%. Eagle expects long-term upside in wallboard, but near-term housing affordability and mortgage-rate challenges continue to weigh on demand.

Eagle Materials NYSE: EXP reported record revenue for fiscal 2026 as strength in cement and aggregates offset continued softness in wallboard tied to residential construction headwinds.

President and Chief Executive Officer Michael Haack told investors that the company delivered “another year of solid execution” despite “unusually high uncertainty in the economic environment.” Annual revenue rose to $2.3 billion, marking the company’s fifth consecutive year of record revenue, while earnings per share totaled $13.16. Eagle also returned more than $400 million to shareholders during the year.

Chief Financial Officer Craig Kesler said fiscal 2026 revenue increased 2% from the prior year, while fourth-quarter revenue also rose 2% to a record $479 million. The gains were driven by higher cement sales volume and contributions from two acquired aggregates businesses, partially offset by lower wallboard sales volume and pricing.

Annual earnings per share declined 4%, reflecting lower net earnings, primarily from reduced wallboard sales volume and pricing. That impact was partially offset by a 5% reduction in fully diluted shares due to the company’s share repurchase program, Kesler said.

Heavy Materials Benefited From Infrastructure and Data Centers

Eagle’s Heavy Materials sector, which includes Cement and Concrete and Aggregates, posted a 10% revenue increase for the year. Kesler said the increase was driven primarily by an 8% rise in cement sales volume and a 19% increase in Concrete and Aggregates revenue.

Aggregates sales volume reached a record 6.6 million tons, up 70% year over year, reflecting contributions from acquired operations. Organic aggregates volume increased 24%, which Kesler said underscored “healthy underlying demand.”

Management attributed volume strength to public infrastructure spending and certain private non-residential construction categories, particularly data centers. Kesler said data centers were “certainly a large contributor” to improvement and added that in many Eagle markets, development is still in early stages, including soil stabilization work.

Haack said infrastructure and cement-intensive non-residential construction are tightening several regional markets. He cited federal infrastructure spending still to come under the Infrastructure Investment and Jobs Act, strong state infrastructure budgets and data center projects across the company’s footprint as factors supporting a favorable Heavy Materials volume outlook.

In response to analyst questions about cement pricing, Kesler said Eagle implemented April 1 price increases in most cement markets, though some Western and Southern markets did not have increases. He noted that higher freight costs would offset some pricing benefits on a net basis.

Wallboard Remained Pressured by Housing Softness

In Eagle’s Light Materials sector, annual revenue fell 9% to $881 million. Kesler said the decline reflected lower wallboard and recycled paperboard sales volume and a 4% decrease in wallboard sales prices, tied to continued softness in residential construction. Operating earnings in the sector declined 15% to $331 million.

Haack said the near-term housing outlook continues to face affordability headwinds, particularly the need for mortgage rate relief to encourage home inventory turnover and normalize new home construction activity. However, he said wallboard sales volumes have remained steady from a historical perspective, and management has seen “relative price stability” given broader industry supply constraints and raw material challenges.

Kesler said Eagle has a June 1 wallboard price increase in the market, driven in part by rising transportation costs. He explained that Eagle prices wallboard on a delivered basis, meaning the company is responsible for the freight bill. Sequentially, he said freight costs increased by roughly $2 to $3, affecting the company’s net sales price.

Asked about current wallboard trends, Kesler said the near-term housing outlook remains unclear, but that over a longer period, the U.S. needs to build significantly more homes. He said management sees long-term upside in wallboard volume, pricing and margins.

Major Plant Modernizations Continue

Haack highlighted two major modernization projects as central to Eagle’s long-term strategy. The Mountain Cement plant modernization in Laramie, Wyoming, is approximately 60% complete, with commissioning of the new kiln line expected to begin in late calendar 2026. Construction on the Duke, Oklahoma, wallboard plant is approximately 30% complete, with commissioning of the new wallboard line expected in the second half of calendar 2027.

Management said the projects are expected to lower cost structures, improve reliability, expand plant capacity and increase production flexibility across Eagle’s network. Kesler said the Mountain Cement project should reduce operating costs primarily through energy savings and a more fuel-efficient facility, while Duke is expected to provide similar benefits.

Kesler said capital expenditures totaled $417 million in fiscal 2026, driven mainly by the Mountain Cement and Duke projects. For fiscal 2027, Eagle expects capital expenditures of $490 million to $525 million, with spending expected to peak during the year. He said sustaining capital needs are roughly $150 million annually after the major projects are completed, though fiscal 2028 spending is expected to remain higher, around $250 million, as Duke is finished.

When asked about expected returns from the Mountain Cement and Duke projects, Kesler said Eagle targets a “double-digit type of return” on investments of this nature, with benefits becoming more visible by fiscal 2029 after both projects are completed and available to run.

Cash Flow, Buybacks and Balance Sheet

Eagle generated operating cash flow of $614 million in fiscal 2026, up 12% from the prior year. The company returned $414 million to shareholders through quarterly dividends and the repurchase of approximately 1.7 million shares for $382 million. Eagle ended the year with approximately 2.9 million shares remaining under its current repurchase authorization.

Kesler said the company strengthened its balance sheet during the year by issuing $750 million of 10-year senior notes at a 5% interest rate. Proceeds were used in part to repay borrowings under Eagle’s bank credit facility. As of March 31, 2026, the company’s net debt-to-capital ratio was 50%, and net debt-to-EBITDA leverage was 1.9 times.

Eagle ended the quarter with $298 million of cash on hand and approximately $1 billion of total committed liquidity. Kesler said the company has no significant near-term debt maturities, which he said positions it to continue investing while maintaining financial flexibility.

Management Emphasizes Long-Term Demand Drivers

Haack said Eagle remains focused on a “through-the-cycle view” rather than near-term volatility. He said the company’s products are essential to infrastructure, schools, hospitals and homes, and that demand for core products remains below prior peak levels even as the U.S. population has grown and existing housing and infrastructure have aged.

He also emphasized the importance of raw material reserves, saying Eagle maintains more than 50 years on average of quarried reserves at each plant through land investments. Haack said controlling limestone, gypsum and rock near company plants provides a cost and supply advantage, particularly during cost spikes and supply chain disruptions.

On capital allocation, Haack said Eagle will continue to prioritize growth investments that meet return criteria, maintaining assets in “like-new condition” and returning cash to shareholders. He said that approach has been the company’s hallmark for the past decade and will remain central to its strategy.

About Eagle Materials NYSE: EXP

Eagle Materials Inc NYSE: EXP is a Dallas, Texas–based manufacturer of building materials serving construction and heavy industry markets across the United States. The company's primary products include portland and masonry cements, gypsum wallboard, lightweight aggregate, paperboard packaging, and roofing granules. These product lines support a wide range of end uses—from residential and commercial buildings to infrastructure projects and industrial applications.

Since its spin-off from a major homebuilding company in 2004, Eagle Materials has grown through targeted facility expansions and strategic acquisitions.

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