Overview

* Stella-Jones ( STLJF ) Q2 sales down 1%, missing analyst expectations, per LSEG data

* Co maintains strong EBITDA margin despite lower sales volumes

* Completed Locweld acquisition, expanding infrastructure offerings

Outlook

* Stella-Jones ( STLJF ) updates 2025 sales outlook to C$3.5 bln from C$3.6 bln

* Company expects above 17% EBITDA margin in 2025

* Stella-Jones ( STLJF ) sees low single-digit growth in utility poles for 2025

* Company anticipates modest decline in railway ties sales for 2025

Result Drivers

* UTILITY POLES - Sales increased due to new customer volumes but were offset by lower pricing and overall volume decline

* RAILWAY TIES - Sales decreased due to a major customer's shift to in-house treatment and project delays

* LOCWELD ACQUISITION - Acquisition contributed positively to sales, expanding infrastructure offerings

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Sales Miss C$1.03 C$1.07

bln bln (8

Analysts

)

Q2 Net C$106

Income mln

Q2 Gross 19.9%

Margin

Q2 C$189

EBITDA mln

Q2 18.3%

EBITDA

Margin

Q2 Gross C$206

Profit mln

Q2 C$155

Operatin mln

g Income

Q2 15.0%

Operatin

g Margin

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

* The average consensus recommendation for the forest & wood products peer group is "buy"

* Wall Street's median 12-month price target for Stella-Jones Inc ( STLJF ) is C$90.00, about 12.8% above its August 6 closing price of C$78.49

* The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 12 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)