Mueller Sales Accelerated as Margins Narrowed
Second-quarter net sales reached $1.428 billion as demand strengthened across commercial, industrial and electrical markets.
Mueller Industries (MLI), the metals manufacturer, accelerated second-quarter sales growth to 25.5%, from 19.3% in the first quarter and 4.2% in the fourth quarter.
The growth mix shifted toward higher unit volumes across all three reporting segments, following price-led growth and lower core copper and brass volumes in the fourth quarter. Higher material-related pricing also contributed as average COMEX copper climbed to $6.16 a pound, up 30.6% from a year earlier.
Net sales rose to $1.428 billion from $1.138 billion a year earlier. Net income increased 1.5% to $249.7 million, while split-adjusted diluted earnings rose to $1.13 a share from $1.11, leaving profit growth well behind the sales gain.
That gap reflected pressure on production costs. Gross margin narrowed to 27.7% from 31.0% a year earlier as cost of goods sold increased 31.5%, faster than revenue. Reported operating income rose 1.9% to $310.0 million because the year-earlier period included a $36.3 million insurance gain; excluding that gain, operating income increased 15.7%.
Piping Systems accounted for most of the revenue, with sales up 27.3% to $946.6 million, though operating income slipped 0.8% and its margin contracted to 26.2% from 33.7%. Industrial Metals provided the strongest earnings growth, lifting operating income 39.8% as sales rose 31.2%, while Climate sales increased 5.4% and operating income was essentially flat.
Quarterly operating cash flow rebounded to $212.3 million from $79.7 million in the first quarter and exceeded the year-earlier period. First-half cash flow still declined as receivables and inventories absorbed more cash.
Demand is strengthening in commercial, industrial and electrical markets and backlogs remain strong, an improvement from late-2024 commentary about construction and tariff-related pressure on volumes.
The company completed its acquisitions of Bison Metals Technologies and Chicago Extruded Metals during the quarter, with Bison delivering a record second quarter. Mueller also raised its quarterly dividend 40% to a split-adjusted $0.175 a share, while first-half repurchases declined to $76.4 million from $243.6 million.