What Awaits Builders FirstSource (BLDR) in Q2 Earnings?
Builders FirstSource, Inc. BLDR is scheduled to report second-quarter 2023 results on Aug 2, 2023, before the opening bell.
In the last reported quarter, the company’s adjusted earnings and net sales topped the Zacks Consensus Estimate by 81.6% and 8.3%, respectively. On a year-over-year basis, earnings and revenues decreased 24.1% and 31.6%, respectively.
The company’s earnings have topped the consensus mark in each of the trailing 18 quarters.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has increased 3.5% to $2.69 per share over the past 30 days. The estimated figure indicates a 57% decline from the year-ago quarter’s earnings of $6.26 per share. The consensus mark for revenues is pegged at $4.25 billion, suggesting a decline of 38.7% from the prior-year quarter’s reported figure.
Builders FirstSource, Inc. Price and EPS Surprise
Builders FirstSource, Inc. price-eps-surprise | Builders FirstSource, Inc. Quote
Factors to Note
Builders FirstSource’s business is primarily dependent on new residential construction as well as repair and remodeling activities. Ongoing challenges in the housing industry comprising of softer housing starts, rising mortgage rates as well as reduced repair and remodeling activities due to lower consumer spending are likely to have affected the company’s net sales.
However, low-existing homes for sale are driving construction opportunities for new homes’ sales. This is likely to have boosted demand for its structural and related building products, which in turn, may help the company to post sequentially higher net sales in the quarter.
Nonetheless, BLDR’s focus on cost synergies, strategic acquisitions, digital solutions and productivity as well as investments in innovations and value-added products are expected to have offset the negatives to some extent.
Given the ongoing challenging conditions in the housing market, BLDR expects net sales to be between $4 billion and $4.2 billion compared with $6.93 billion reported a year ago.
Segment-wise, our model predicts Value-Added Products’ sales (comprising 55.9% of first-quarter 2023 net sales) to be $2.04 billion, down 30.1% year over year and 6% sequentially.
We expect Specialized Product & Other sales (comprising 21.6% of first-quarter 2023 net sales) to be $837 million, down 28.7% year over year and 0.2% sequentially.
Our model predicts Lumber & Lumber Sheet Goods’ sales (comprising 22.5% of first-quarter 2023 net sales) to be $1.23 billion, down 56.4% year over year but up 41.6% sequentially.
From the margin perspective, supply-related constraints, and high costs associated with raw materials, labor and transportation are expected to have put pressure on second-quarter margins.
The company anticipates adjusted EBITDA in the range of $525-$575 million for second-quarter 2023, down from $1.51 billion reported in the year-ago period. We expect adjusted EBITDA to be $543.5 million for the quarter, down 63.9% from the year-ago period.
For the quarter to be reported, the company anticipates adjusted EBITDA margin to be between 13.113.7% compared with 21.8% reported in the year-ago period. We expect adjusted EBITDA to be 13.2% for the quarter, down from the year-ago period.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Builders FirstSource this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Builders FirstSource has an Earnings ESP of +19.85% and flaunts a Zacks Rank #1.
Other Stocks With Favorable Combinations
Here are some other companies in the Zacks Construction sector that too have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Howmet Aerospace Inc. HWM has an Earnings ESP of +1.99% and sports a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
HWM’s earnings topped the consensus mark in two of the last four quarters and remined on par of other two occasions, the average being 4.2%. Earnings for the to-be-reported quarter are expected to decrease 22.9% year over year.
AECOM ACM has an Earnings ESP of +1.05% and a Zacks Rank #2.
ACM’s earnings for the to-be-reported quarter are expected to increase 10.5%. The company reported better-than-expected earnings in the last four quarters, the average surprise being 4.8%.
Louisiana-Pacific Corporation LPX has an Earnings ESP of +5.54% and sports a Zacks Rank of #3.
LPX’s earnings for the to-be-reported quarter are expected to decline 84.7%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 98.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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AECOM (ACM) : Free Stock Analysis Report
Louisiana-Pacific Corporation (LPX) : Free Stock Analysis Report
Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
