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Factors Setting the Tone for Masco's (MAS) Earnings in Q2

Masco Corporation MAS is scheduled to report second-quarter 2022 results on Jul 28, before the opening bell.

In the last reported quarter, the company’s earnings and sales topped the Zacks Consensus Estimate by 7.9% and 5.9%, respectively. On a year-over-year basis, earnings and sales increased 6.7% and 12%, respectively.

Masco’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, the average surprise being 6.4%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for Masco’s second-quarter earnings is pegged at $1.19 per share, suggesting an increase of 4.4% from the year-ago quarter’s figure of $1.14. Earnings estimates for the said period have remained unchanged over the past 60 days. The consensus estimate for net sales is pegged at $2.35 billion, indicating an 8% increase from the prior-year quarter’s figure.

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

 

Factors to Note

Market-leading brands, new product introductions and healthy backlogs are expected to have contributed to Masco’s top-line growth in second-quarter 2022. The company has been witnessing a strong performance in the Decorative Architectural Products and Plumbing Products segments. Its paint business, especially within the PRO and DIY markets, has been witnessing strong growth in the past few quarters. The same is likely to have contributed to the to-be-reported quarter’s performance.

Geographically, North America and International markets have been riding high on solid demand from the housing industry. The company expects the North American repair and remodel market and the European market to remain robust in the quarter. Additionally, regular acquisitions, cost-control measures and significant capital deployment are expected to have contributed to second-quarter performance.

The Zacks Consensus Estimate for Plumbing Products’ sales of $1,371 million indicates a 3.2% improvement from the year-ago reported figure. The same for the Decorative Architectural Products segment’s sales is currently pegged at $982 million, suggesting an increase of 15.5% from the year-earlier reported number.

The bottom line is expected to have dented in the quarter to be reported, thanks to intense inflationary pressure, particularly on commodities and logistics. Apart from the above-mentioned costs, MAS has been incurring expenses related to product launches and acquisitions.

The consensus mark for non-GAAP operating profit for the Decorative Architectural Products unit is pegged at $191 million, suggesting growth of 1.6% from the prior-year reported figure. The same for non-GAAP operating profit for Plumbing Products is pegged at $261 million, calling for a decline from the year-ago quarter’s figure of $274 million.

What the Zacks Model Unveils

Our proven model doesn’t not conclusively predicts an earnings beat for Masco 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, MAS has a Zacks Rank #3 and an Earnings ESP of 0.00%.

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

Stocks With Favorable Combination

Here are some other companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Lennox International Inc. LII has an Earnings ESP of +1.61% and carries a Zacks Rank #3.

The earnings of LII topped the consensus mark in three of the last four quarters but missed on one occasion, with the average surprise being 8.2%.

Eagle Materials Inc. EXP has an Earnings ESP of +1.56% and holds a Zacks Rank #3.

The earnings of EXP topped the consensus mark in three of the last four quarters, with the average surprise being 4.8%.

KBR, Inc. KBR has an Earnings ESP of +1.81% and a Zacks Rank #1.

The earnings of KBR topped the consensus mark in the last four quarters, with the average surprise being 12%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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