What Awaits Simpson Manufacturing (SSD) in Q2 Earnings?
Simpson Manufacturing Co., Inc. SSD is slated to report second-quarter 2023 results on Jul 24, after the closing bell.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 40.4% but declined 6% year over year. The downside in the North America net sales (down 7.4%) was mainly due to lower volume, along with higher operating expenses, which ailed the bottom line.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Simpson Manufacturing’s second-quarter earnings is pegged at $2.13 per share, suggesting a fall of 1.4% from the year-ago quarter’s figure of $2.16. Earnings estimates for the said period have remained stable in the last two months.
Simpson Manufacturing Company, Inc. Price and EPS Surprise
Simpson Manufacturing Company, Inc. price-eps-surprise | Simpson Manufacturing Company, Inc. Quote
Factors to Note
Simpson Manufacturing is expected to have registered lower earnings in the second quarter, owing to continued softness in the North America volume and higher expenses. The company has been experiencing inflationary pressure, a tight labor market and an unusually wet winter that are likely to impact its second-quarter results.
Particularly the Wood construction product, which contributed 85% of net sales in first-quarter 2023, is expected to reduce total net sales due to previously announced decreases in the pricing of certain wood products.
The company also generates costs related to research and development, acquisitions and marketing and advertising. Foreign currency translation is also a concerning factor, as the company’s business in Europe is experiencing the same. These are expected to further compress margins in the yet-to-be-reported quarter.
Nonetheless, acquisitions have been an integral part of SSD. The recent buyouts are expected to boost sales in the second quarter.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for SSD 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, which is not the case here, as elaborated below.
Currently, Simpson Manufacturing has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
PulteGroup, Inc. PHM has an Earnings ESP of +0.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PHM’s earnings missed the consensus mark once but beat the same on three other occasions, the average surprise being 15.6%. Earnings for the to-be-reported quarter are expected to decrease 9.5% year over year.
Taylor Morrison Home Corporation TMHC has an Earnings ESP of +0.90% and a Zacks Rank #2.
TMHC’s earnings topped the consensus mark in all the last four quarters, the average being 17.3%. Earnings for the to-be-reported quarter are expected to grow 26.9% year over year.
Meritage Homes Corporation MTH has an Earnings ESP of +0.98% and a Zacks Rank #2.
MTH’s earnings topped the consensus mark in all the last four quarters, the average being 17.3%. Earnings for the to-be-reported quarter are expected to decline 48.5% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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PulteGroup, Inc. (PHM) : Free Stock Analysis Report
Meritage Homes Corporation (MTH) : Free Stock Analysis Report
Simpson Manufacturing Company, Inc. (SSD) : Free Stock Analysis Report
Taylor Morrison Home Corporation (TMHC) : Free Stock Analysis Report
