Trex (TWP) Blows It Out On EPS, But Issues Soft Guidance

Trex (TWP) reported a strong quarter, posting an EPS of .49 vs the analyst estimate of .20, good for an 81% bump over the year ago quarter.  Revenues came in about 8% higher than expectations at 91.5 million but were off a bit from the year ago quarter.  As we’ve seen with so many companies this quarter, they’re beating handily on the EPS side through cost cutting but the revenue growth is still quite soft.

CEO Ron Kaplan commented, “The fundamental change in purchasing patterns we predicted for 2009 continued in the second quarter. Because of the tough economy, customers have been holding inventories low and ordering primarily based on pull-through demand from the consumer. This trend greatly reduced the importance of this year’s early-buy season, shifting a larger proportion of our sales activity to the second and third quarters. We’re pleased that in these challenging times so many consumers have been selecting Trex(R) as the preferred choice to help maximize their outdoor living experience.

After an initial bump higher, the stock is selling off a bit, most likely due to soft guidance for the 3rd quarter.  The company expects revenues of $70 million vs the analyst expectations of $85 in revenue. 


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