12:26 PM EST, 11/05/2024 (MT Newswires) -- Builders FirstSource ( BLDR ) cut its full-year sales outlook on Tuesday as the building product supplier recorded lower-than-expected third-quarter revenue, while earnings topped market estimates.

The company now anticipates sales in a range of $16.25 billion to $16.55 billion for 2024, down from its previous guidance of $16.4 billion to $17.2 billion. The current consensus on Capital IQ is for revenue of $16.85 billion. The company continues to project single-family starts to be up by low-single digits and the multi-family component to decline 25% to 30%.

"We anticipate a regional financial impact from Hurricane Helene and Milton, around $40 million in sales, a relatively modest amount given our geographic diversification," incoming Chief Financial Officer Pete Beckmann said on an earnings call, according to a Capital IQ transcript. Beckmann will succeed Peter Jackson, who is taking over as chief executive from Dave Rush, effective Wednesday.

Adjusted earnings before interest, taxes, depreciation and amortization are now pegged at $2.25 billion to $2.35 billion for the current year, compared with the prior outlook of $2.2 billion to $2.4 billion.

For the September quarter, Builders FirstSource's ( BLDR ) adjusted earnings fell to $3.07 per share from $4.24 the year before, but topped the Street's view for $3.02. Sales decreased to $4.23 billion from $4.53 billion in the prior-year period, compared with analysts' $4.45 billion estimate.

"Single-family softness continued in (the third quarter), amid ongoing affordability challenges and below normal starts," Jackson said on the call. "The initial reaction to the (Federal Reserve's) first interest rate cut in September has been mixed, with some homebuyers remaining on the sidelines and waiting for additional rate cuts as mortgage rates fluctuate in the near term."

Core organic sales slipped 7.2%, driven by a 31% decline in the multi-family segment. "Multifamily continues to be a headwind amid muted activity is expected," according to Jackson. "Comparisons should get less negative as we lap record performance from last year."

Gross margin decreased by 210 basis points to 32.8%, driven by ongoing multi-family and core organic normalization, the company said.

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