Matrix Service Company MTRX is set to release fiscal first-quarter 2020 results after the closing bell on Wednesday, Nov 6. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 26 cents per share on revenues of $397 million.
Let’s delve into the factors that might have influenced the company’s performance in the quarter ended September.
Factors to Consider
Strong operational performance at Matrix’s Storage Solutions division, which is responsible for more than 50% of the company’s operating income, is likely to have contributed to its fiscal first-quarter bottom line. In the previous three-month period, the company’s segment income surged to $8.7 million compared with just $802,000 in last year’s corresponding period. This trend most likely continued in the fiscal first quarter, primarily driven by higher tank and terminal construction volumes from recent project awards.
Additionally, the company’s Oil Gas & Chemical segment is expected to have benefited from strong project execution associated with maintenance works. Moreover, robust iron and steel work is likely to have contributed to the Industrial unit sales.
But on a bearish note, cost headwinds might have dampened the performance of this provider of engineering, fabrication, construction and repair and maintenance services. Matrix’s cost of sales in the fiscal fourth-quarter of 2019 came 30.7% above the year-ago quarter. The cost structure is likely to have deteriorated in the to-be-reported quarter as well due to higher-than-expected power project outlays in the Electrical Infrastructure segment.
What Does Our Model Say?
The proven Zacks model does not conclusively predict that Matrix is likely to beat estimates in the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Matrix has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 26 cents.
Zacks Rank: Matrix has a Zacks Rank of 2.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Highlights of Q4 Earnings & Surprise History
In the last reported quarter, the Tulsa, OK-based company beat the consensus mark on strong contribution from the Storage Solutions unit. Matrix reported earnings per share of 47 cents that surpassed the Zacks Consensus Estimate by 4 cents.
As far as earnings surprises are concerned, the service provider to a broad range of industries is on a solid footing, having gone past the Zacks Consensus Estimate in three of the last four reports, with the average positive surprise being 8.3%. This is depicted in the graph below:
Price and EPS Surprise
price-eps-surprise | Quote
Stocks to Consider
While earnings beat looks uncertain for Matrix, here are some firms from the energy space you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this season:
Canadian Natural Resources Limited CNQ has an Earnings ESP of +7.42% and is Zacks #3 Ranked. The company is scheduled to release earnings on Nov 7.
Berry Petroleum Corporation BRY has an Earnings ESP of +0.21% and a Zacks Rank #3. The company is scheduled to release earnings on Nov 7.
NuStar Energy L.P. NS has an Earnings ESP of +47.01% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Nov 5.
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