Construction Stock Earnings Due on Aug 3: PWR, VMC, MTZ & BLD
Strong non-residential and infrastructural activities and improvement in the supply chain issues and labor shortages are driving solid results for the Zacks Construction sector this quarter. Additionally, sequential improvements in the residential market and recently increased remodeling activities are encouraging.
Per the latest Earnings Outlook, the Q2 earnings season has seen releases from approximately 46.2% of the construction companies on the S&P 500 Index. Of them, the sector’s total earnings are down 11.9% from the year-ago period on 3.5% higher revenues, with 100% beating earnings per share estimates and 83.3% beating revenue estimates.
The construction sector earnings listed on the S&P 500 Index are expected to decline 14.3% year over year in the to-be-reported quarter, compared with the 19.1% fall registered in first-quarter 2023. Revenues are projected to increase 3.4% year over year versus a rise of 2.8% recorded in the last reported quarter.
What’s Driving the Sector?
The rising demand for infrastructural activities for public project work is expected to have supported growth for the non-residential players. Strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply-chain investments will have aided the sector. Increased fiber deployments in the telecommunications networks to provide gigabit network speeds to individual consumers and businesses using 5G technologies are likely to have acted as tailwinds for these companies’ quarterly performance.
Other factors like favorable weather, prudent cost-saving efforts, a disciplined approach to bidding, project management, buyouts synergies and increased road repair and maintenance works are added positives.
Although residential and remodelling markets are low year over year, they have improved sequentially. The desire to own a home amid a lack of existing homes for sale, focus on cost control, increased operating leverage and important buyouts will likely help the companies to partially offset accelerated mortgage rates, increased raw material and labor cost woes.
These above-mentioned tailwinds are expected to have contributed to the quarterly performances of Quanta Services, Inc. PWR, Vulcan Materials Company VMC, MasTec, Inc. MTZ and TopBuild Corp. BLD.
Construction Stocks to Watch for Aug 3
A handful of companies from the construction space are likely to release their respective quarterly results on Aug 3. Let’s take a quick glance at how these stocks are poised ahead of their respective earnings release.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Quanta is slated to report second-quarter results before the opening bell. The chances of PWR delivering an earnings beat are low this time around as it has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for second-quarter earnings per share (EPS) remained unchanged at $1.67 over the past 60 days. The estimated figure indicates an 8.4% increase from the year-ago EPS of $1.54. The consensus mark for revenues is $4.69 billion, suggesting a 10.9% year-over-year rise.
Quanta Services, Inc. Price and EPS Surprise
Quanta Services, Inc. price-eps-surprise | Quanta Services, Inc. Quote
The development and deployment of technology solutions across the full spectrum of decarbonization efforts, including carbon management mitigation and compliance consulting, as well as all facets of infrastructure for providing carbon-free energy solutions, are likely to have benefited Quanta Services in the to-be-reported quarter. (Read more: Renewable Drive to Benefit Quanta Services' Q2 Earnings)
Vulcan is scheduled to report second-quarter 2023 results before the opening bell. VMC is unlikely to beat earnings this time as it has a Zacks Rank #3 and an Earnings ESP of -0.94%.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised upward to $1.91 from $1.90 over the past 30 days. The estimated figure indicates a rise of 24.8% from the year-ago quarter. The consensus estimate for revenues is pegged at $2.06 billion, suggesting a 5.5% year-over-year growth.
Vulcan Materials Company Price and EPS Surprise
Vulcan Materials Company price-eps-surprise | Vulcan Materials Company Quote
Vulcan is likely to have generated higher revenues and earnings in the second quarter of 2023 on the back of higher spending from a number of states that it serves. Also, resilient pricing across the product lines is expected to have supported the growth. (Read more: Non-Residential Market, Pricing to Aid Vulcan's Q2 Earnings)
MasTec is slated to report second-quarter 2023 results after the closing bell. MTZ has an Earnings ESP of 0.00% and sports a Zacks Rank #3, which does not conclusively predict an earnings beat this time around.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is unchanged at 86 cents per share in the past 60 days. The estimated figure indicates a rise of 17.8% from the year-ago level. The consensus mark for revenues is $3.01 billion, suggesting a 30.7% year-over-year improvement.
MasTec, Inc. Price and EPS Surprise
MasTec, Inc. price-eps-surprise | MasTec, Inc. Quote
MasTec expects revenues of $3 billion, up from $2.3 billion reported in second-quarter 2022. Adjusted EBITDA is estimated to be $250 million, up from $178.5 million a year ago. The adjusted EBITDA margin is expected to be 8.3%, up from 7.8% reported in the prior year. The company expects to report adjusted earnings per share of 86 cents for second-quarter 2023, up from the previous year’s figure of 73 cents.
TopBuild is slated to report second-quarter results before the opening bell. The chances of BLD delivering an earnings beat are low this time around as it has an Earnings ESP of -1.03% and a Zacks Rank #1.
The Zacks Consensus Estimate for second-quarter 2023 earnings per share has decreased to $4.35 from $4.36 in the past 30 days. The estimated figure indicates a 1.8% decline from the year-ago quarter’s reported value. For net sales, the consensus mark is pegged at $1.27 billion, suggesting a slight decline of 0.4% from the year-ago quarter’s reported figure.
TopBuild Corp. Price and EPS Surprise
TopBuild Corp. price-eps-surprise | TopBuild Corp. Quote
BLD is expected to have benefitted from high sales volume and selling prices in its Installation as well as Specialty Distribution segments.
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Quanta Services, Inc. (PWR) : Free Stock Analysis Report
Vulcan Materials Company (VMC) : Free Stock Analysis Report
MasTec, Inc. (MTZ) : Free Stock Analysis Report
TopBuild Corp. (BLD) : Free Stock Analysis Report
