Stella-Jones (SJ) Q1 2026 earnings summary

Executive summary

• Q1 2026 sales increased to $791 million from $773 million, driven by strong utility products demand, recent acquisitions, and resilience across core businesses.

• Operating income declined to $97 million from $143 million year-over-year, reflecting a less favorable product mix and higher costs.

• Net income was $60 million ($1.10 per share), down from $93 million ($1.67 per share) last year; adjusted net income was $61 million ($1.12 per share).

• Cash flow from operations improved to $47 million from a negative $16 million last year.

• Utility products showed double-digit volume growth for wood utility poles and sustained momentum.

Financial highlights

• Adjusted EBITDA was $136 million (17.2% margin), down from $141 million (18.2%) last year, mainly due to product mix and compensation adjustments.

• Gross profit was $155 million (19.6% margin), down from $168 million (21.7% margin) year-over-year.

• Utility product sales reached $469 million, up 12% from last year, entirely volume-driven.

• Railway tie sales were $198 million, down 5% due to FX; stable excluding currency impact.

• Residential lumber sales fell 14% to $76 million, impacted equally by lower volumes and pricing.

Outlook and guidance

• Utility products expected to maintain mid-single digit growth for the year, with Q1's 12% volume growth not expected to persist into Q3/Q4.

• Railway tie sales expected to remain flat year-over-year in 2026, with low single-digit growth over three years.

• Residential lumber guidance remains at $600 million–$650 million for the year, with a late spring start but positive volume trends.

• Cost savings from railway tie optimization ($10–15 million annualized) to begin in 2027.

• Strategic focus on optimizing railway ties production and expanding U.S. steel lattice manufacturing.