Carlisle Q3 profit rises 6% as re-roofing demand lifts sales

Carlisle Companies Inc. (CSL) said on Oct. 28 that third-quarter revenue rose 9% to $1.46 billion and adjusted EPS rose 6% to a record $5.92. Shares fell 1.5% in after-hours trading as of 7:34 p.m. ET, from a regular-session close of $345.47.

Adjusted EPS was in line with the $5.95 consensus estimate compiled by Finnhub. Revenue was above the $1.44 billion estimate from the same source.

Here's how the company did:

• Adjusted EPS: $5.92 vs. $5.61 a year earlier, in line with the $5.95 estimate compiled by Finnhub
• Diluted EPS from continuing operations: $5.22 vs. $4.97 a year earlier
• Revenue: $1,463.4 million vs. $1,346.9 million a year earlier, above the $1.44 billion estimate compiled by Finnhub
• Operating margin: 20.0% vs. 21.8% a year earlier
• Adjusted EBITDA margin: 23.8% vs. 25.9% a year earlier

The company said in a filing furnished with its press release that the results were for the quarter ended Sept. 30.

Segment results

Carlisle Construction Materials revenue rose 8% to $1.1 billion, or 9% on an organic basis. The company attributed the growth to strategic initiatives, including data center traction, along with pricing and solid re-roofing demand.

CCM adjusted EBITDA increased 1% to $306 million. The adjusted EBITDA margin was 28.2%, down 200 basis points year over year, as raw material and freight cost inflation outpaced pricing.

Carlisle Weatherproofing Technologies revenue rose 9% to $379 million, or 10% on an organic basis. Share gains and weather conditions that drove demand for roof coatings outweighed continued weakness in new construction.

CWT operating income rose 31% to $39 million. Adjusted EBITDA increased 13% to $68 million, and the margin was 18.0%, up 60 basis points year over year.

Outlook and costs

The company expects fourth-quarter revenue to grow at a high-single-digit percentage year over year, with a flat adjusted EBITDA margin. That outlook matches the one it gave on July 29.

Renewed escalation of the conflict in the Middle East drove petroleum-derived raw material, diesel and freight costs higher, the company said. It said pricing lags cost and drove the year-over-year decline in the adjusted EBITDA margin.

Chair, President and Chief Executive Officer Chris Koch said, “We view this as a timing issue, not a structural one.” He added that the company expects the benefit of its pricing actions to keep building through the fourth quarter and into 2027.

Capital returns

The company repurchased $350 million of shares during the quarter. For the first nine months, it returned $990 million to shareholders through $850 million of share repurchases and $140 million of dividends.

The company increased its quarterly dividend 14%, its 50th consecutive annual increase. It said it remains on track for a $1.2 billion share repurchase target for 2026.

Free cash flow from continuing operations was $407 million for the nine months ended Sept. 30. The company had $547 million in cash and cash equivalents at quarter end.