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Martin Marietta (MLM) to Post Q2 Earnings: What's in Store?

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Martin Marietta Materials, Inc. MLM is slated to report second-quarter 2018 results on Jul 26, before the opening bell. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 36%. In fact, Martin Marietta has a dismal earnings surprise history. The company’s earnings fell shy of expectations in three of the last four quarters, with the average miss being 3.27%.

Let’s take a look at the factors that are likely to influence the company’s second-quarter 2018 results.

Given solid underlying demand, supported by favorable household formation trends and a strengthening macro backdrop, second-quarter earnings are expected to mark an improvement from the first quarter (due to inflation, bad weather and rising rates) for the building product companies like Martin Marietta.

The company is expected to witness higher demand in the to-be-reported quarter compared with the first quarter due to wet weather in Dallas/Fort Worth. An uptick in private construction activity is expected to provide much support to the company’s top line. The residential market accounted for 24% of first-quarter 2018 aggregates shipments. The company has been experiencing higher single-family housing activity, which is more aggregates-intensive than multi-family activity. The trend is expected to have continued in the second quarter as well.

Meanwhile, construction spending in the United States has increased lately, supported by a steady increase in outlays on private as well as public construction projects. Sustained growth in construction activity drives demand for aggregates and cement businesses, thereby helping it to boost profitability.

Again, earlier string of acquisitions or divestitures is expected to provide some cushion to its revenues and earnings.

Overall, for the second quarter, the Zacks Consensus Estimate for earnings is pegged at $2.84, reflecting year-over-year growth of 26.2%. The Zacks Consensus Estimate for revenues stands at $1.18 billion, indicating a rise of 18.1% from the year-ago quarter.

Martin Marietta Materials, Inc. Price and EPS Surprise

 

Martin Marietta Materials, Inc. Price and EPS Surprise | Martin Marietta Materials, Inc. Quote

What Our Model Indicates

Martin Marietta has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Earnings ESP: Martin Marietta has an Earnings ESP of +0.42%.

Zacks Rank: Currently, Martin Marietta sports a Zacks Rank #1 (Strong Buy).

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks Worth a Look

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

Boise Cascade Company BCC has an Earnings ESP of +14.97% and sports a Zacks Rank #1. The company is expected to report quarterly numbers on Jul 26, 2018.

KBR, Inc. KBR has an Earnings ESP of +2.29% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is slated to report quarterly results on Jul 30, 2018.

Louisiana-Pacific Corporation LPX has an Earnings ESP of +8.62% and carries a Zacks Rank #1. The company is slated to report quarterly numbers on Aug 7, 2018.

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