* Q2 loss $0.14/shr vs est. -$0.09/shr
* Q2 sales $285.4 mln vs est. $280.9 mln
* Sees strong H2
* Shares fall as much as 5 pct
(Recasts; adds conference call details, analyst comments,
By Megha Mandavia
BANGALORE, May 7 Roofing products distributor
Beacon Roofing Supply Inc (BECN.O) posted a wider-than-expected
quarterly loss, hurt by severe winter conditions that saw sales
of residential roofing products drop sharply.
The company, which gets majority of its revenue from
residential construction, said sales in the first two months of
2010 were severely affected by winter conditions and the
improvement in March could not offset the drop.
The winter quarter, when most construction pauses, is
always the weakest for building companies. The snowiest winter
in 20 years in Europe and the United States, together with the
economic crisis, made this quarter exceptionally bad.
Sales in March and April were up 8 percent, compared with
the drop of 14 percent in January and 28 percent in February.
The company expects the rest of the year to be strong as
market conditions improve, it said on a conference call.
"Probably the pent-up demand has been left over from the
harsh winter that we had -- a lot of work was postponed. So
they get benefit from the postponement of the work in the
spring," Needham & Co analyst Theodor Kundtz said.
The economic recovery is also helping the company, he
Beacon Roofing said it was also seeing some signs of growth
in six of its regions in the residential segment.
While non-residential construction is still struggling
under tepid demand and frozen markets, housing starts have seen
an uptick, to touch their highest levels since November 2008.
The company expects gross margins to increase to between 23
percent and 24.5 percent for the year, helped by price
increases. Second-quarter gross margin dropped to 21.4 percent
from 23.3 percent a year ago.
RESIDENTIAL ROOFING HURTS Q2
For the second quarter, Beacon reported a net loss of $6.5
million, or 14 cents a share, compared with a net loss of $2.4
million, or 5 cents a share, a year earlier.
Net sales fell 11 percent to $285.4 million. Sales of
residential roofing products dropped 17 percent to $143
Analysts on average were expecting a loss of 9 cents per
share on revenue of $280.9 million, according to Thomson
Shares of the Peabody, Massachusetts-based company fell as
much as 5 percent to $18.91, but pared some losses and were
trading almost flat at $19.89 Friday afternoon on Nasdaq.
(Reporting by Megha Mandavia; Editing by Unnikrishnan Nair)