Eagle Materials (NYSE:EXP) reported fiscal third-quarter 2026 results that management said reflected solid performance across the business despite what it described as a “mixed construction environment.” Revenue totaled $556 million, earnings per share were $3.22, and gross profit margin was 28.9%, according to comments on the company’s earnings call.
President and CEO Michael Haack said Eagle’s approach remains centered on controlling what it can in “choppy times,” emphasizing safety, cost control, customer reliability, operational efficiency, and return-focused investments while maintaining balance sheet strength. CFO Craig Kesler added that quarterly revenue was down slightly from the prior year, primarily due to lower wallboard and paperboard sales volumes, partially offset by higher cement volumes and contributions from a recently acquired aggregates business.
Heavy materials posted growth as cement and aggregates volumes rose
On demand trends, Haack told analysts the strength was “pretty broad-based” across Eagle’s markets, supported by infrastructure spending and growth in key non-residential end markets such as data centers. He cautioned, however, that it is difficult to establish a trend early in the year given winter weather. Still, management expressed optimism entering calendar 2026.
Cement pricing was a recurring topic in the Q&A. Management said it has announced price increases in most markets, generally around $8 per ton, excluding Texas and the far west markets. Kesler said timing ranges between January and April 2026 depending on market and customer conversations, with realization determined regionally rather than nationally.
When asked about cement margin pressure during the quarter, Kesler said costs were largely in line, though purchased raw material costs were higher. He added that maintenance was “largely in check” and fuel costs were consistent with prior commentary.
Light materials pressured by housing-driven demand and lower pricing
In the light materials sector, Kesler reported revenue declined 16% to $203 million due to lower wallboard and recycled paperboard volumes and a 5% decline in wallboard sales prices. Operating earnings in the segment fell 25% to $73 million, primarily because of lower wallboard volumes and pricing.
Management attributed wallboard weakness to a challenged residential construction environment and ongoing affordability issues. Haack cited industry data showing calendar 2025 wallboard shipments of about 25.4 billion square feet, which he characterized as returning to a 2018 pace. He said pricing declines were not surprising in that environment, but described pricing as “range-bound” relative to prior cycles, reflecting industry cost structure changes.
On regional performance, Haack said the company’s 14% shipment decline was fairly consistent across its footprint and generally in line with regional performance. When asked about the trajectory of wallboard demand, management said trends remained consistent through the second half of the year and expected similar conditions entering calendar 2026, aside from winter-related disruptions.
Kesler also addressed input costs, noting that Eagle has a hedging program for natural gas—more relevant for wallboard than cement—and is “a little more than 50% hedged” through the winter. He said recent spikes appeared driven by colder temperatures and did not reflect a structural shift in natural gas markets.
Management provided additional detail on end-market mix, estimating repair and remodel accounts for roughly one-third of wallboard demand and describing it as a steadier category with forward expectations of low single-digit growth, even as new residential construction remains pressured.
Capital projects, cost initiatives, and operational flexibility
Haack highlighted a set of operational initiatives designed to improve Eagle’s low-cost producer position, including efforts to convert waste streams into revenue streams. Examples cited on the call included reclaiming decades-old cement-related waste streams for raw material use, using aggregates fines and overburden to support raw materials and extend reserves, and expanding capabilities at the Republic Paper Mill to repurpose non-wallboard-grade paper and trim rolls into higher value products. He also said American Gypsum is recycling 100% of waste wallboard back into production except at the Duke facility, which is expected to reach 100% following completion of its modernization.
Management said many of these projects require minimal or no capital investment but have an outsized operational benefit. Haack also provided updates on two major projects:
- Mountain Cement plant modernization (Laramie, Wyoming): Management expects commissioning late in the current calendar year. Haack said recent kiln downtime further supports the modernization rationale, though Eagle can meet customer needs using its broader plant network “albeit at an increased cost.”
- Duke wallboard facility modernization (Oklahoma): Management expects commissioning in the second half of calendar 2027.
Haack said both investments are expected to lower plant cost structures, strengthen Eagle’s competitive position, and deliver strong returns on investment.
Balance sheet actions and shareholder returns
Eagle also emphasized financial discipline and liquidity. Haack said the company issued $750 million of 10-year senior notes during the quarter to align its capital structure with ongoing investments at Mountain Cement and Duke. Kesler said the notes carry a 5% interest rate, improve the debt maturity schedule, increase committed liquidity, and that a portion of the proceeds was used to repay the bank credit facility.
As of Dec. 31, 2025, Kesler said Eagle had $419 million of cash, total committed liquidity of about $1.2 billion, net debt-to-capital of 48%, and a net debt-to-EBITDA leverage ratio of 1.8x. Management said the company has no meaningful near-term debt maturities.
During the fiscal third quarter, Eagle returned nearly $150 million to shareholders through dividends and share repurchases, including approximately 648,000 shares repurchased. Through the first nine months of fiscal 2026, the company repurchased about 1.4 million shares, or 4% of shares outstanding, with roughly 3.3 million shares remaining under the current authorization.
Looking ahead, Haack said Eagle will continue prioritizing safety, operational excellence, and disciplined capital allocation while pursuing growth opportunities that meet strategic and financial criteria.
About Eagle Materials (NYSE:EXP)
Eagle Materials Inc (NYSE:EXP) is a Dallas, Texas–based manufacturer of building materials serving construction and heavy industry markets across the United States. The company’s primary products include portland and masonry cements, gypsum wallboard, lightweight aggregate, paperboard packaging, and roofing granules. These product lines support a wide range of end uses—from residential and commercial buildings to infrastructure projects and industrial applications.
Since its spin-off from a major homebuilding company in 2004, Eagle Materials has grown through targeted facility expansions and strategic acquisitions.
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