Carlisle Companies [NYSE: CSL] reported its third-quarter 2023 adjusted earnings, which excludes $0.61 from non-recurring items, of $4.68 per share, which surpassed most analysts' consensus estimate of $4.57, but its bottom line declined year over year.

Carlisle’s total revenues of $1,259.8 million missed the Zacks Consensus Estimate of $1,273 million. The top line decreased year over year, with a 16.1% decline in organic revenues.

“The third quarter marked a significant milestone in Carlisle’s 105-year history,” the company said in a statement released after its earnings call on Oct. 26. “With the recent announcement of the plan to sell CIT and it being reclassified to discontinued operations in the third quarter, we have effectively completed our restructuring of the Carlisle portfolio of businesses with what we have referred to as the “Pivot,” and become a pure-play building products company.”

Segmental Discussion

Carlisle has divested its Carlisle Interconnect Technologies segment. The company now reports under the following two segments.

Revenues from Carlisle Construction Materials decreased 16.2% year over year to $914 million. Organic revenues declined 16.5%, which the company attributed to weakness in end markets. Adjusted EBITDA of $289.4 million decreased 18.3% year over year. Zacks Equity Research estimate for the quarter was $302.9 million.

Revenues from Carlisle Weatherproofing Technologies declined 15% year over year to $345.8 million attributed to residential demand weakness and project delays. Zacks’ estimate for segmental revenues was $383 million. Organic revenues slipped around 15%. Adjusted EBITDA of $80.8 million jumped 36.7% year over year, but analysts’ anticipated segmental adjusted EBITDA was $100.1 million.

Margin Profile

Carlisle’s cost of sales declined 19.2% year over year to $793.7 million. Selling and administrative expenses decreased 0.3% to $161.7 million. Research and development expenses totaled $7.2 million in the third quarter of 2023, up 44% year over year.

CSL recorded operating income of $299.9 million, down 7.4% year over year. Operating margin increased to 23.8% compared with 21.6% in the year-ago quarter.

Balance Sheet and Cash Flow

Carlisle had cash and cash equivalents of $108 million at the end of the third quarter, compared with $364.8 million at the end of Q4 2022. Long-term debt (including the current portion) was $2,285.5 million compared with $2,582.9 million at the end of Q4 2022.

In the first nine months of 2023, Carlisle generated net cash of $812.4 million from operating activities compared with $588.6 million in the year-ago period.

In the same period, CSL, carrying a Zacks Rank No. 5, meaning “strong sell,” rewarded its shareholders with dividend payments equalling $119.3 million, up 24.8% year over year. The company bought back shares worth $580 million, up more than 100% year over year.

Despite missing its analysts’ target revenue, Carlisle shares recovered losses after its earnings report and opened trading up nearly 2.5%, at $254.98, still up for the year but down from its 2023 highwater mark of $288.37 per share last August.

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