Beacon (BECN) to Post Strong Q2 Earnings on Cost Synergies
Beacon Roofing Supply, Inc. BECN is slated to report second-quarter 2022 results on Aug 4, after market close.
In the last reported quarter, the company delivered better-than-expected earnings and revenues, which topped the Zacks Consensus Estimate by 81.6% and 18%, respectively. On a year-over-year basis, the top line increased 28% on higher pricing.
Beacon beat the consensus mark in the trailing four quarters, with an average being 28.1%.
Earnings & Revenue Expectation
The Zacks Consensus Estimate for Beacon’s second-quarter revenues is pegged at $2.29 billion, indicating an increase of 22.3% from the year-ago reported figure. The consensus estimate for earnings is pegged at $2.36 per share, suggesting growth of 48.4% on a year-over-year basis.
Beacon Roofing Supply, Inc. Price and EPS Surprise
Beacon Roofing Supply, Inc. price-eps-surprise | Beacon Roofing Supply, Inc. Quote
Factors to Note
Beacon is likely to have registered year-over-year higher revenues and earnings in the second quarter. Its focus on sales and operational execution, product availability and cost management is likely to have boosted the company’s performance in the to-be-reported quarter. The company expects end-market demand to remain strong, despite inflationary pressures, supply chain disruption and labor and material shortages.
About 70-75% of overall sales and more than 80% of the roofing business is R&R based, largely non-discretionary. Its residential roofing demand and the residential exposed areas within our complementary products are expected to have benefited from R&R and new construction market tailwinds.
It has been benefiting from disciplined cost management and productivity initiatives. Further, strategic moves undertaken to strengthen the balance sheet, enhance financial flexibility and sharpen focus on the core exteriors business are commendable.
The company anticipates a gross margin within 27-27.5%. Also, it expects second-quarter net sales to increase in the low 20% on a year-over-year basis.
The Zacks Consensus Estimate for Residential roofing revenues of $1.175 billion indicates a 19.7% increase from the year-ago period’s levels. The same for Non-residential roofing products’ net sales is $635 million, suggesting a 30.4% growth from a year ago. The consensus mark for Complementary building products’ existing market net sales is pegged at $462 million, indicating a 14.4% year-over-year rise.
What Our Model Indicates
Our proven model predicts an earnings beat for Beacon this time around. That is because 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.
Earnings ESP: Its Earnings ESP is 8.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With a Favorable Combination
Here are a few companies from the Zacks Retail-Wholesale sector that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat for the to-be-reported quarter:
The Wendy's Company WEN has an Earnings ESP of +0.46% and a Zacks Rank #2.
WEN’s earnings surpassed the consensus mark in three out of four quarters and missed once, the average being 14.2%.
Ulta Beauty ULTA currently has an Earnings ESP of +2.46% and a Zacks Rank #1.
ULTA has a trailing four-quarter earnings surprise of 49.8%, on average.
Yum! Brands, Inc. YUM has an Earnings ESP of +2.14% and a Zacks Rank #3.
YUM’s earnings surpassed the consensus mark in two out of four quarters and missed twice, the average being 7.4%.
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Beacon Roofing Supply, Inc. (BECN) : Free Stock Analysis Report
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