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Construction Stocks' Oct 30 Earnings Roster: MAS, TMHC & More

Shrabana Mukherjee

The construction sector’s quarterly releases are expected to reflect benefits from rebounding housing market dynamics and strong public sector construction activity (mainly in large transportation and highways projects).

Also, a number of project awards across multiple business segments, including communications, transmission and power, and infrastructural projects in domestic as well as international markets along with strong pricing are likely to have contributed to growth. A rise in defense spending in the United States, rising public investment in water infrastructure and utility plants as well as encouraging prospects in the healthcare market have probably favored construction companies in the quarter.

Meanwhile, the U.S. residential market is expected to have benefitted from declining mortgage rates. Also, a modest rise in home prices, changing demographics and a solid job market are likely to have provided support.

Per the latest Earnings Preview, construction sector earnings are expected to grow 3.9% in the third quarter against a 5.4% drop in the second. Revenues are projected to increase 1.6% (versus flat growth in Q2).

However, rising freight expenses, higher incentives to drive sales along with higher land/labor costs might have weighed on margins of many companies in the construction space.

Q3 Performance So Far

Gibraltar Industries, Inc. ROCK reported third-quarter 2019 results, wherein its earnings and sales not only topped analysts’ expectations but also improved year over year on solid growth. Weyerhaeuser Company WY reported mixed third-quarter 2019 results, wherein earnings missed the Zacks Consensus Estimate, while net sales beat the same. Universal Forest Products, Inc. UFPI reported mixed results in third-quarter 2019, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
 
Construction Stocks Reporting on Oct 30

Let's see how things are shaping up for four Construction companies that are set to report third-quarter 2019 numbers tomorrow.

Our research 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.

Masco Corporation MAS is slated to report before the opening bell. In the last reported quarter, the company reported mixed results, wherein earnings topped the Zacks Consensus Estimate by 8.6% but revenues missed the same by 2.7%. In fact, Masco surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 2.4%, as shown in the chart below:

Masco Corporation Price and EPS Surprise

Masco Corporation Price and EPS Surprise

Masco Corporation price-eps-surprise | Masco Corporation Quote

Our proven model predicts an earnings beat for Masco as it has an Earnings ESP of +0.61% and a Zacks Rank #3.

For the quarter to be reported, the Zacks Consensus Estimate for earnings is currently pegged at 71 cents, unchanged over the past 30 days. This also reflects a drop of 9.2% from year-ago earnings of 65 cents. Revenues are expected at $2.15 billion, suggesting a rise of 2.2% year over year (Read More: Masco to Report Q3 Earnings: What's in the Cards?).

Taylor Morrison Home Corporation TMHC is scheduled to report before the opening bell. In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 20.1% and 11.5%, respectively. The company reported better-than-expected results in the last four quarters, the average positive earnings surprise being 41.8%, as shown in the chart below:

Taylor Morrison Home Corporation Price and EPS Surprise

 

Taylor Morrison Home Corporation Price and EPS Surprise

Taylor Morrison Home Corporation price-eps-surprise | Taylor Morrison Home Corporation Quote

Our proven model does not predict an earnings beat for Taylor Morrison this season as it has an Earnings ESP of 0.00% and a Zacks Rank #1.

For the quarter to be reported, the Zacks Consensus Estimate for earnings is currently pegged at 66 cents per share, unchanged over the past 30 days. The estimate calls for a 20.5% year-over-year decline. Total revenues, however, are expected at $1.15 billion, suggesting 10.7% year-over-year growth (Read More: Taylor Morrison Gears Up for Q3 Earnings: What's Up?).

KBR, Inc. KBR is scheduled to report before market open. In the last reported quarter, the company’s earnings and revenues topped the Zacks Consensus Estimate by 2.5% and 3.3%, respectively. In fact, its earnings topped estimates in the past four quarters, the average positive surprise being 8.7%, as shown in the chart below:

KBR, Inc. Price and EPS Surprise

 

KBR, Inc. Price and EPS Surprise

KBR, Inc. price-eps-surprise | KBR, Inc. Quote

Meanwhile, our proven model predicts an earnings beat for KBR this time around, as it has an Earnings ESP of +0.38% and a Zacks Rank #3.

For the quarter to be reported, the Zacks Consensus Estimate for the company’s earnings trended upward over the past seven days to 44 cents. The estimate suggests a decline of 4.4% from the year-ago earnings of 46 cents. Revenues are expected at $1.44 billion, indicating a rise of 12.7% year over year.

Strong underlying performance of its overall portfolio — with robust contribution from Government Solutions and Technology businesses — is expected to show on the company’s third-quarter numbers.

Rayonier Inc. RYN is slated to report after the closing bell. In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 16.7% but revenues missed the same by 5.8%. In fact, its earnings topped estimates in three of the past four quarters, the average positive surprise being 68.3%, as shown in the chart below:

Rayonier Inc. Price and EPS Surprise

 

Rayonier Inc. Price and EPS Surprise

Rayonier Inc. price-eps-surprise | Rayonier Inc. Quote

Meanwhile, our proven model does not predict an earnings beat for Rayonier this season as it has an Earnings ESP of 0.00% and a Zacks Rank #3.

For the quarter to be reported, the Zacks Consensus Estimate for earnings is pegged at 3 cents, unchanged over the past 30 days. The earnings estimate calls for a decline of 83.3% from year-ago earnings of 18 cents. Revenues are projected at $167.5 million, suggesting a drop of 16.6% year over year.

Its international presence exposes the company to foreign exchange fluctuations. Also, uncertainty associated with the U.S.-China trade dispute and choppy lumber market conditions are likely to reflect in its quarterly results.

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Masco Corporation (MAS) : Free Stock Analysis Report
 
Weyerhaeuser Company (WY) : Free Stock Analysis Report
 
Universal Forest Products, Inc. (UFPI) : Free Stock Analysis Report
 
Rayonier Inc. (RYN) : Free Stock Analysis Report
 
Taylor Morrison Home Corporation (TMHC) : Free Stock Analysis Report
 
KBR, Inc. (KBR) : Free Stock Analysis Report
 
Gibraltar Industries, Inc. (ROCK) : Free Stock Analysis Report
 
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