Here's What to Expect From Boise Cascade's (BCC) Q3 Earnings
Boise Cascade Company BCC is scheduled to report third-quarter 2023 results on Oct 31 after market close.
In the last reported quarter, the company’s earnings and sales topped the Zacks Consensus Estimate by 44.5% and 11.8%, respectively. However, the bottom and the top lines declined 33.2% and 20.2% year over year.
Boise Cascade’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, the average surprise being 25.5%.
Trend in Estimate Revision
The Zacks Consensus Estimate for third-quarter 2023 earnings per share has increased to $3.47 from $3.44 over the past 30 days. Yet, the estimated figure indicates a 37.1% decline from the prior-year quarter’s reported earnings of $5.52 per share.
Boise Cascade, L.L.C. Price and EPS Surprise
Boise Cascade, L.L.C. price-eps-surprise | Boise Cascade, L.L.C. Quote
For sales, the consensus mark is pegged at $1.85 billion, suggesting a decline of 14.2% from the prior-year quarter’s reported figure of $2.16 billion.
Key Factors to Consider
The demand for Boise Cascade’s products is dependent on new residential construction, residential repair-and-remodeling activity and light commercial construction. Considering the current housing market scenario, the company’s third-quarter 2023 results are most likely to be pressured to a notable extent on a year-over-year basis. Owing to the high mortgage rates and ongoing economic uncertainties, consumers have been facing house affordability issues, which have been resulting in slow housing starts. Also, home improvements and renovation spending are likely to have been moderated year over year.
That said, sequential improvements are likely to have been witnessed in the to-be-reported quarter due to resilient market demand despite ongoing economic risks, partially offsetting the aforementioned headwinds. Furthermore, the company expects new residential construction, and repair and remodel activities to be favorable in the long term along with strong demographic trends and low existing home inventory.
Segment-wise, notable lower commodity pricing and moderate decline in sales volume are quite likely to have impacted the year-over-year performance of the Building Materials Distribution (BMD) segment (which accounted 75.6% for second-quarter 2023 total sales).
Also, lower plywood sales prices are expected to have impacted the company’s Wood segment (which accounted 24.4% for second-quarter 2023 total sales). Yet, higher plywood sales volumes, higher engineered wood products (EWP) sales prices and lower wood fiber costs are likely to have partly offset the negatives.
Furthermore, the company’s organic growth initiatives for its BMD segment, strategic growth investments in the operating segments, accretive buyouts and EWP capacity expansion are likely to have offset the aforementioned risks to some extent.
Meanwhile, Boise Cascade’s margins are likely to have been affected by ongoing inflationary pressures, lower commodity product margins and lower sales volumes across product lines. Also, an increase in selling and distribution along with general and administrative expenses have been concerns for the company’s bottom line.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Boise Cascade this time around. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: BCC has an Earnings ESP of -4.99%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 2.
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat for their respective quarters to be reported.
KBR, Inc. KBR has an Earnings ESP of +6.36% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
KBR’s earnings for the to-be-reported quarter are expected to increase 12.3%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 10.8%.
Louisiana-Pacific Corporation LPX has an Earnings ESP of +2.07% and a Zacks Rank of 3.
LPX is expected to register a 19.2% decline in earnings for the to-be-reported quarter. The company reported better-than-expected earnings in three of the trailing four quarters and missed on the remaining one occasion, the average surprise being 95.8%.
Dycom Industries, Inc. DY has an Earnings ESP of +1.24% and a Zacks Rank of 2.
DY’s earnings for the to-be-reported quarter are expected to grow 4.73%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 147.4%.
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KBR, Inc. (KBR) : Free Stock Analysis Report
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Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
