What's in the Cards for NCI Building (NCS) in Q1 Earnings?

NCI Building Systems, Inc. NCS is scheduled to report first-quarter fiscal 2018 results, after the market closes on Mar 6.

Last quarter, the company’s earnings came well ahead of the Zacks Consensus Estimate. Also, NCI Building surpassed the consensus mark in two out of the trailing four quarters, with an average positive earnings surprise of 9.74%.

Let’s see how things are shaping up for this announcement.

NCI Building Systems, Inc. Price and EPS Surprise

 

NCI Building Systems, Inc. Price and EPS Surprise | NCI Building Systems, Inc. Quote

Key Factors

For the fiscal first quarter, NCI Building anticipates revenues to be in the range of $390-$410 million and adjusted EBITDA to lie between $24 million and $34 million. Also, the company is well poised to gain from success in leveraging IMP (insulated metal panel) product sales to the Components and Building groups.

Notably, in order to strategically manage its business, NCI Building has realigned its segments by reporting Insulated Metal Panel as a separate business segment effective from the fiscal first quarter.

Furthermore, the company’s focus on investments in automation and process innovation is likely to slash operating costs and improve margins, quality and service in the quarter to be reported. It also expects to benefit from further cost reductions in the Lean and the Six Sigma initiatives across the entire business.

However, NCI Building’s performance in the fiscal first quarter might be affected by volatile steel prices. Further, fluctuations in the value of the U.S. dollar are likely to impact the company’s revenues and expenses.

Earnings Whispers

Our proven model does not show that NCI Building is likely to beat earnings this quarter as it lacks the key components. A stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. This is not the case here as you will see below:

Zacks ESP: NCI Building has an Earnings ESP of 0.00%. This is because the Most Accurate estimate of 9 cents is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NCI Building carries a Zacks Rank #3. Although this increases the predictive power of ESP, the company’s ESP of 0.00% makes an earnings prediction uncertain.

Conversely, stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement should be avoided, especially when the company is seeing negative estimate revisions.

Share Price Performance

In the past year, NCI Building has underperformed the industry with respect to price performance. The stock has lost 3.7% against the industry’s rally of 8.8%.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Ply Gem Holdings, Inc PGEM has an Earnings ESP of +1.78% and a Zacks Rank #2. Its shares have gained 36.9% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Owens Corning Inc OC has an Earnings ESP of +1.65% and a Zacks Rank of 2. Shares of the company have gained 6.5% during the same time frame.

KB Home KBH has an Earnings ESP of +4.73% and a Zacks Rank #3. The stock has gained 29.1% in six months’ time.

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NCI Building Systems, Inc. (NCS) : Free Stock Analysis Report
 
Ply Gem Holdings, Inc. (PGEM) : Free Stock Analysis Report
 
Owens Corning Inc (OC) : Free Stock Analysis Report
 
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