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Construction Stock Q3 Earnings Due on Oct 27: URI, MAS, OC, CHX

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·5 min read
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The Zacks Construction sector is expected to have gained from solid demand trends in the housing market and infrastructural projects (comprising communications, transmission, and power) despite supply chain disruptions as well as rising raw material costs.

The sector has been reaping benefits from the thriving U.S. housing market, given low mortgage rates and the desire to own a home amid the pandemic-induced work-home-home trend. It has also been gaining from higher demand stemming from accelerated repair and remodel activity.

A number of project awards across multiple business segments — including communications, transmission, and power — along with infrastructural projects in domestic as well as international markets also contributed to the companies’ performance. Increasing defense spending in major economies like the United States, rising public investments in water infrastructure and utility plants as well as encouraging prospects in the healthcare market are expected to have acted as tailwinds.

Yet, higher raw material costs are likely to have affected the company’s margins. Additionally, higher labor and transportation costs may have been risks.

Overall Prediction

Per the latest Earnings Outlook dated Oct 20, 2021, the construction sector earnings are expected to increase 17.4% for the third quarter, indicating a decrease from 66% registered in second-quarter 2021. Revenues are projected to increase 13.5%, suggesting a decline from 24.2% growth registered in the prior quarter.

Construction Stocks to Watch

Let’s take a quick glance at how the following construction stocks are poised ahead of their third-quarter earnings releases on Oct 27.

Our proven model shows that companies with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP have higher chances of beating earnings estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

United Rentals, Inc. URI is slated to report third-quarter results after the closing bell. In the last reported quarter, this largest equipment rental company’s earnings missed the Zacks Consensus Estimate by 3.1% but revenues beat the same by 3.6%. Markedly, its earnings surpassed expectations in three of the last four quarters and missed on another occasion, with the average surprise being 12.7%, as shown in the chart below:

United Rentals, Inc. Price and EPS Surprise

United Rentals, Inc. Price and EPS Surprise
United Rentals, Inc. Price and EPS Surprise

United Rentals, Inc. price-eps-surprise | United Rentals, Inc. Quote

Its chances of delivering an earnings beat are low this time around as it has a Zacks Rank #3 and an Earnings ESP of -0.03%.

The Zacks Consensus Estimate for United Rentals’ third-quarter earnings is pegged at $6.80 per share, implying 25.9% growth on a year-over-year basis. The consensus estimate for revenues is $2.60 billion, indicating a 19% year-over-year increase (read more: Factors Setting the Tone for United Rentals Q3 Earnings).

Masco Corporation MAS is slated to report quarterly results before the opening bell. In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 9.6% and 0.4%, respectively. Markedly, its earnings surpassed expectations in all the last four quarters, with the average being 19.4%, as shown in the chart below:

Masco Corporation Price and EPS Surprise

Masco Corporation Price and EPS Surprise
Masco Corporation Price and EPS Surprise

Masco Corporation price-eps-surprise | Masco Corporation Quote

Its chances of delivering an earnings beat are also low this time around as it has a Zacks Rank #4 (Sell) and an Earnings ESP of +3.21%.

The Zacks Consensus Estimate for Masco’s third-quarter earnings is pegged at 87 cents per share, implying a 16.4% decline on a year-over-year basis. The consensus estimate for revenues is $2.10 billion, indicating a 6.1% year-over-year increase (read more: Masco to Report Q3 Earnings: What's in the Offing?).

Owens Corning OC is slated to report quarterly results before the opening bell. In the last reported quarter, the company’s sales and earnings beat the Zacks Consensus Estimate by 13.5% and 23.8%, respectively. Markedly, it beat earnings expectations in the last four quarters, with the average being 27.8%, as shown in the chart below:

Owens Corning Inc Price and EPS Surprise

Owens Corning Inc Price and EPS Surprise
Owens Corning Inc Price and EPS Surprise

Owens Corning Inc price-eps-surprise | Owens Corning Inc Quote

Similar to Masco, the chances of Owens Corning delivering an earnings beat for the third quarter are low, as it has an Earnings ESP of -6.07% and a Zacks Rank #4.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at $2.51 per share, implying 47.7% growth on a year-over-year basis. The consensus estimate for revenues is $2.15 billion, indicating a 13.1% year-over-year increase (read more: Owens Corning to Post Q3 Earnings: What’s in Store?).

ChampionX Corporation CHX is scheduled to report quarterly results after market close. In the last reported quarter, sales and earnings beat the Zacks Consensus Estimate by 13.5% and 23.8%, respectively. Markedly, the company beat earnings expectations in the last four quarters, with the average being 27.8%, as shown in the chart below:

ChampionX Corporation Price and EPS Surprise

ChampionX Corporation Price and EPS Surprise
ChampionX Corporation Price and EPS Surprise

ChampionX Corporation price-eps-surprise | ChampionX Corporation Quote

ChampionX has an Earnings ESP of -5.88% and a Zacks Rank #3.

The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at 17 cents per share, implying 466.7% growth on a year-over-year basis. The consensus estimate for revenues is $804.8 million, indicating a 27% year-over-year increase.

Higher volume, price increase realization and cost synergies are expected to benefit third-quarter results. It has been performing well, courtesy of an evolving energy market environment, navigating the ongoing challenges associated with raw material and logistics inflation.


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Masco Corporation (MAS) : Free Stock Analysis Report

United Rentals, Inc. (URI) : Free Stock Analysis Report

Owens Corning Inc (OC) : Free Stock Analysis Report

ChampionX Corporation (CHX) : Free Stock Analysis Report

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