Shares of Quanex Building Products (NYSE: NX) plummeted 20.61% in after-hours trading on Thursday following the release of the company's third-quarter earnings report, which fell short of analyst expectations and included lowered full-year guidance.

The building products manufacturer reported adjusted earnings per share of $0.69 for the fiscal third quarter, missing the consensus estimate of $0.84. While revenue came in slightly above expectations at $495.3 million compared to estimates of $491.6 million, the earnings miss and other factors led to the sharp sell-off.

Key highlights from Quanex's Q3 results include: - Net sales increased 76.7% year-over-year to $495.3 million, primarily due to the Tyman acquisition - Adjusted EBITDA of $70.3 million, below analyst estimates of $80.6 million - Gross margin of 27.9%, up from 25.3% in the same quarter last year - Took a $302.3 million non-cash goodwill impairment charge related to business re-segmentation

Quanex also lowered its full-year guidance, now expecting fiscal 2025 net sales of approximately $1.82 billion, down from its previous outlook of $1.84-$1.86 billion. The company cut its adjusted EBITDA forecast to approximately $235 million from the prior range of $270-$280 million.

George Wilson, Chairman, President and Chief Executive Officer, commented on the results: "Although macroeconomic uncertainty and low consumer confidence, as well as operational issues related to the legacy Tyman window and door hardware business in Mexico that are ongoing but temporary in nature, posed challenges for us in our third quarter, we remain optimistic about our prospects for profitable growth and value creation."

The steep after-hours decline suggests investors are concerned about the earnings miss, compressed margins, and cautious outlook amid economic headwinds. Quanex will host a conference call on Friday morning to discuss the results in more detail and potentially provide additional context on the challenges facing the business.