CRH (CRH) Q3 2026 earnings review
CRH cuts its full-year profit plan as costs squeeze margins
CRH grew its top line through acquisitions while cost inflation and weak homebuilding squeezed its underlying profit. Total sales at the building materials supplier rose 3% to $11.4 billion, but sales from businesses it owned a year ago edged up just 1% by our math and their operating profit shrank. Chief executive Jim Mintern cut the full-year Adjusted EBITDA outlook by $400 million at the middle of the range, even though closing the $8.5 billion Arcosa buyout early adds two months of fourth-quarter revenue.
| Sales from businesses owned a year ago | +1.1% by our math, vs +3.6% last quarter |
|---|---|
| Adjusted EBITDA | $2.68B -0.5% from a year ago (margin down 0.8 percentage points) |
| Diluted profit per share | $1.86 -16% from a year ago |
| Full-year Adjusted EBITDA outlook | Cut $400M middle of the range: $7.9B (+2.9% growth) |
⚖️ Verdict: 🔴 Bearish
The story got worse because price increases on stone and asphalt failed to cover rising costs, forcing a full-year profit cut after three quarters of holding the plan steady. To protect margins, CRH launched a two-year restructuring plan called Velocity and changed its Adjusted EBITDA definition to exclude those restructuring and deal costs. On the positive side, the early Arcosa closing expands its US aggregates and utility-structures reach, and the board authorized a $6 billion share buyback through 2030.
The question now is whether CRH's growth model is running into a margin wall or just digesting a bad housing year and deal timing. Either infrastructure projects and the Arcosa integration lift underlying profit in 2027, or persistent cost inflation shows that recent growth was bought through acquisitions rather than earned on existing assets. Fourth-quarter underlying profit in Americas Materials and the initial 2027 outlook will tell.
🐂 Bull Case
Arcosa Closes Early and Expands Infrastructure Reach
CRH has been selling consumer-facing units to buy infrastructure and water businesses. Chief executive Jim Mintern said the $8.5 billion purchase of Arcosa, a US supplier of crushed stone and utility poles, closed on October 23, ahead of the original early-2027 plan, "reinforcing our position as the leading aggregates and critical infrastructure player in North America".
Data center and utility construction is already lifting the units CRH owns. Revenue in Americas Building & Infrastructure Solutions, which makes concrete products for energy and water systems, jumped 16% from a year ago, helped by the recent purchase of water-treatment firm Axius Water. Arcosa adds an engineered structures division that supplies electrical grid and data center builders, though financing the all-cash deal required $5.8 billion in new term and bridge loans.
What to watch: Arcosa's stand-alone revenue and profit contribution in the fourth-quarter report. A strong reading will show whether new infrastructure deals can offset the debt cost and the slowdown in older businesses.
Aggregates and Asphalt Pricing Holds Up
Even with weak housing demand, CRH kept raising prices for its core heavy materials in both North America and Europe. In Americas Materials Solutions, its largest division, revenue rose 6% as higher prices for aggregates (crushed stone, sand and gravel) and asphalt combined with road and data center project demand.
- Americas aggregates: prices up 5%, volumes up 2%
- Americas asphalt and ready-mix concrete: asphalt prices up 7% (volumes down 2%), ready-mix prices up 3% (volumes up 2%)
- Americas cement: prices down 2%, volumes flat on weak residential demand
- International Solutions: aggregates prices up 5% (volumes up 9%), cement prices up 6% (volumes up 1%)
European and international markets also improved, lifting International Solutions Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and one-offs) by 6% and its margin by 1.1 percentage points to 20.6%. That international strength cushioned the drop in North American building products.
What to watch: Americas aggregates and cement pricing in the fourth quarter. If cement price declines spread to crushed stone, CRH will struggle to pass on its rising operating costs.
Board Approves a $6 Billion Buyback Program
CRH paused its regular $300 million quarterly share repurchases in June to save cash for the Arcosa buyout. In the third quarter, the building materials group bought back just 0.8 million shares for $0.1 billion, bringing nine-month repurchases to $0.7 billion against $0.9 billion a year ago.
Alongside the third-quarter results, the board authorized a new share buyback program of up to $6 billion running through the end of 2030 and raised the quarterly dividend by 5% to $0.39 per share. The authorization signals that management intends to resume returning cash after digesting Arcosa, though the $6 billion ceiling spread over more than four years does not guarantee a fast near-term pace.
What to watch: the size of the next quarterly buyback tranche announced with full-year results. A return to $300 million per quarter would show that post-Arcosa debt levels are not holding back cash returns.
🐻 Bear Case
Cost Inflation and Weak Housing Cut Full-Year Profit
"Against a challenging and volatile inflationary cost backdrop our teams delivered a resilient Q3 performance reflecting disciplined commercial execution, performance improvement initiatives and positive underlying demand in key end-markets," chief executive Jim Mintern said. Yet CRH cut its full-year Adjusted EBITDA outlook by $400 million at the middle of the range, to $7.8–8.0 billion, even though closing Arcosa two months early adds fourth-quarter earnings.
The company said the revision reflects "the earlier than anticipated completion of the Arcosa Acquisition, the inflationary cost backdrop and a more challenging residential construction market". In the third quarter, the cost of making products rose by 1.4 percentage points of revenue to 38.2%, and smaller gains on land sales took another 0.8 points off the operating margin, which fell 2.2 points to 16.6%. Adjusted EBITDA margin dropped 0.8 points to 23.5%.
Net income fell 22% to $1.18 billion, hit by a $178 million impairment charge in the Philippines cement business. For the full year, CRH cut its net income outlook by $800 million at the middle of the range because of $200 million in impairments, $200 million in deal costs, $100 million in higher net interest and the $400 million operating shortfall.
What to watch: fourth-quarter Adjusted EBITDA margin against last year's 21.5%. Another drop would show that price increases are still lagging cost inflation heading into 2027.
Underlying Profit Shrank While Acquisitions Carried Sales
CRH's 3% headline revenue growth came from buying more businesses than it sold. Across the three divisions, acquisitions added $683 million of third-quarter sales and divestitures removed $452 million, while sales from businesses it owned a year ago rose just $122 million, or 1.1% by our math, down from 3.6% in the second quarter.
- Americas Materials Solutions underlying change: sales up $65 million (+1.2%), Adjusted EBITDA down $49 million (-3.2%)
- Americas Building Solutions underlying change: sales down $20 million (-1.1%), Adjusted EBITDA down $80 million (-18.5%)
- International Solutions underlying change: sales up $77 million (+2.1%), Adjusted EBITDA up $34 million (+4.9%)
- Total underlying Adjusted EBITDA: down $95 million, or 3.5% by our math, offset by $126 million from acquisitions
Underlying profit fell in both North American divisions because price increases did not cover cost inflation and last year's third quarter included a land-sale gain in Americas Building Solutions. Without newly acquired companies, CRH's third-quarter operating profit would have declined noticeably.
What to watch: underlying Adjusted EBITDA change in Americas Materials Solutions next quarter. A second negative reading in CRH's core stone and asphalt unit would confirm that organic profit growth has stalled.
New Profit Definitions Exclude Restructuring and Deal Costs
In the same quarter that it cut its full-year outlook, CRH changed how it calculates its headline profit measures. The company revised Adjusted EBITDA to exclude "substantial acquisition-related integration costs and transformation-related costs", which added back $49 million of Velocity restructuring charges and $4 million of deal costs in the third quarter.
Without that change, third-quarter Adjusted EBITDA would have fallen 2.3% from a year ago by our math, instead of the 0.5% dip reported. Management also introduced a new metric for its full-year outlook, Adjusted Diluted EPS, which adds back $0.28 per share of deal costs, $0.29 of intangible asset amortization from past acquisitions, and restructuring expenses.
What to watch: the gap between GAAP diluted earnings per share and Adjusted Diluted EPS in 2027. For a company that buys dozens of businesses every year, excluding deal integration and intangible amortization removes ongoing costs of its strategy.
Risks this quarter didn't answer
Two standing concerns about CRH's North American pipeline could not be tested from the earnings release alone.
- US federal highway funding reauthorization: the release notes public infrastructure demand but gives no update on the highway bill renewal that underpins multi-year road paving.
- Construction backlog and remaining performance obligations: the release does not include the quarterly backlog table, which arrives in the Form 10-Q filing.
- Data center project count and revenue share: management cited strong data center activity but did not update the project count in the release.
👓 Other Themes
Velocity Program Targets $400 Million in Savings
CRH launched a two-year restructuring program called Velocity, aimed at "delivering an enhanced scalable operating model that will support ongoing strategy execution" by simplifying management layers and using artificial intelligence and data across its 4,000 locations. The company expects Velocity to generate $400 million in annual savings by the end of 2028 and to cost $400 million in one-off charges, including $49 million booked this quarter.
💲 Other KPIs
Cash generated from operations over the first nine months fell 16.2% from $2,710 million a year ago, as a $2,262 million seasonal build in customer receivables and $495 million in cash tax payments weighed on inflows. By our math, third-quarter operating cash flow was $1,758 million, down 11.7% from $1,991 million in last year's third quarter.
Net debt — total borrowings and finance leases minus cash and derivatives — stood at $15.04 billion on September 30, up 0.3% from $15.01 billion a year earlier and up from $14.15 billion at year-end. That snapshot predates the October 23 closing of the $8.5 billion Arcosa buyout, which CRH funded with a $2.5 billion term loan, a $3.3 billion bridge loan and cash.
Average diluted shares fell 1.3% from 675.5 million a year ago. The reduction slowed because CRH bought back only 0.8 million shares in the third quarter after pausing its regular repurchase tranches in June to prepare for the Arcosa closing.
🔮 Guidance
Cut. The middle of the range dropped by $400 million to $7.9 billion, or 2.9% growth from last year, after being held at $8.3 billion for three straight quarters. By our math, that leaves $2.01 billion for the fourth quarter, down 1.1% from a year ago even after adding two months of Arcosa.
Cut. Management lowered the middle of the range by $800 million to $3.2 billion, a 15.6% drop from last year's total net income. Half of the reduction comes from the $400 million cut to operating profit, while the rest reflects $200 million of impairments, $200 million of deal costs and $100 million of higher net interest.
Cut. The middle of the range fell by $1.09 to $4.74 per share, down 14.0% from $5.51 in 2025. By our math, the new full-year plan leaves $0.95 per share for the fourth quarter, down 37.5% from $1.52 in last year's fourth quarter as Arcosa closing costs and interest hit.
New. CRH introduced this metric, which excludes impairments, divestiture gains, deal and restructuring costs, and intangible amortization, with a middle of $5.48 per share. That is $0.74 per share higher than its GAAP diluted EPS outlook.
Cut. CRH trimmed its capital spending plan by $100 million for a second straight quarter, putting the middle of the range at $2.7 billion, roughly even with last year's $2.71 billion. By our math, that leaves $875 million of spending for the fourth quarter, up 6.6% from a year ago.
❓ Key Questions
How much profit does Arcosa add in Q4?
CRH included Arcosa in the revised 2026 outlook after closing the deal on October 23, two months early. Without knowing Arcosa's fourth-quarter contribution, investors cannot see how much CRH's existing operations were cut inside the $400 million Adjusted EBITDA reduction.
Why did underlying profit fall in Americas Materials?
Aggregates prices rose 5% and asphalt prices rose 7% in North America, yet underlying Adjusted EBITDA in Americas Materials Solutions fell by $49 million. Management blamed cost inflation, but did not specify whether energy, labor or subcontractors caused the squeeze.
What are the construction backlog and data center numbers?
In prior quarters management highlighted rising bid volumes and 200 active data center projects. The third-quarter release gave no figures for remaining performance obligations or data center project counts, leaving open whether order books are slowing alongside organic revenue.
How fast will CRH use the $6 billion buyback?
The board approved up to $6 billion of share repurchases through 2030 just as CRH took on $5.8 billion in new debt Facilities for Arcosa. Management did not state a target debt ratio or whether quarterly buybacks will return to the previous $300 million pace.