By The construction industry in the United States is undergoing a significant boom as efforts to revitalize manufacturing gain traction. This resurgence is bringing the production of cars, chips, and renewable energy back to American soil.
On Thursday, CRH (ticker: CRH), a leading provider of construction materials and road builders in the country, announced its first-half 2023 earnings. The company reported an impressive $1.58 earnings per share on sales totaling $16.1 billion. This surpassed Wall Street’s expectations, which predicted $1.41 earnings per share and $15.8 billion in sales.
The growth in sales for CRH’s U.S. aggregates and road construction businesses was noteworthy, with a 9% increase compared to the previous year. This growth was primarily driven by a 15% spike in aggregate prices, which are crucial components used in concrete and construction projects. Furthermore, the company experienced a remarkable 21% year-over-year growth in its U.S. building solutions businesses. This increase was attributed to the rising demand and generous public funding in sectors such as telecommunications, water, and energy utilities.
Looking ahead to the remainder of the year, CRH management forecasts earnings before interest, taxes, depreciation, and amortization (EBITDA) to reach $6.2 billion. However, analysts on Wall Street project slightly lower figures, estimating approximately $6 billion according to FactSet data.
Despite the overwhelmingly positive performance, CRH shares faced a minor setback in premarket trading, dropping by 3.3%. In contrast, futures for the S&P 500 and Nasdaq Composite indexes were up by 0.5% and 1.2%, respectively.
It is important to note that CRH shares have witnessed an impressive upward trajectory this year, appreciating by 45% year-to-date and 20% over the past three months. Such remarkable growth has heightened investor expectations, making positive news seemingly indispensable.
Nvidia Continues to Impress Investors
Nvidia (NVDA) continues to dominate the minds of investors, delivering yet another exceptional quarter. In its fiscal-second-quarter report, the company reported sales of $13.5 billion, surpassing its own guidance of $11 billion. Wall Street was expecting sales closer to $12 billion. As a result, Nvidia stock is up 8% in premarket trading, reaching above $500 per share and hitting record highs.
CRH: A Hidden Gem Overshadowed by Nvidia
While Nvidia steals the spotlight, CRH operates quietly under the radar. As a European company based in Dublin, CRH reports its figures on a half-year basis, which may be unfamiliar to U.S. investors accustomed to quarterly numbers. However, with approximately 75% of its Ebitda originating from the U.S., CRH is shifting its primary stock listing to the New York Stock Exchange, aiming to attract more U.S.-based analysts and investors.
Anticipating Insights on the Construction Industry
Shareholders recently approved this listing swap, indicating a potential rise in U.S. interest in the company. In an effort to provide more information to investors, CRH management will be hosting a conference call at 8 a.m. Eastern time, where they will discuss the company’s results and shed light on the upcoming listing swap. Investors will also be keen to hear about the construction industry’s demand as we move towards 2024 and beyond.
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