Sterling (STRL) to Report Q3 Earnings: Here's What to Expect
Sterling Construction Company, Inc. STRL is slated to report third-quarter 2023 results on Nov 6, after the closing bell.
In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 36.6% and increased 47.7% year over year. Revenues increased 13.1% year over year, topping the consensus mark by 6.3%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) has increased to $1.25 from $1.24 over the past 60 days. The estimated figure indicates a rise of 28.9% from the year-ago quarter’s figure of 97 cents.
The consensus estimate for revenues is pegged at $561.6 million, indicating a 0.8% increase from the prior-year period.
Factors to Note
Sterling's third-quarter performance is expected to have benefited from its strategic emphasis on higher-margin, lower-risk projects and its business transformation efforts to establish itself as a prominent specialty infrastructure provider.
The diversified portfolio, encompassing Transportation Solutions, E-Infrastructure Solutions, and Building Solutions divisions, is likely to have provided a favorable backdrop, mitigating market risks. Sterling has been actively executing a strong pipeline of projects for prominent clients engaged in the construction of new distribution centers, data centers, and warehouses.
However, challenges related to inflation, seasonality, potential material delays, and labor issues might have exerted pressure on its third-quarter results.
Segment-wise, the E-infrastructure Solutions business is likely to have gained from bolt-on acquisitions, high levels of demand from data centers and advanced manufacturing customers. Its Building Solutions segment is likely to have witnessed soft demand, especially from the residential market. The segment has been experiencing inflationary pressure and interest rate hikes, due to which management has announced multiple price increases. These headwinds might have put pressure on third-quarter results. Nonetheless, higher levels of commercial work are likely to somewhat offset these negatives.
The Transportation Solutions segment is likely to have gained from an increase in non-highway service revenues. The rising demand for infrastructural activities for public project work and a continued mix shift toward higher margin work are expected to have supported growth.
Sterling Infrastructure, Inc. Price and EPS Surprise
Sterling Infrastructure, Inc. price-eps-surprise | Sterling Infrastructure, Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Sterling 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.
Sterling has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector that have the right combination of elements to post an earnings beat on their respective quarters to be reported.
KBR, Inc. KBR has an Earnings ESP of +6.36% and carries a Zacks Rank #2.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.8%. Earnings for the to-be-reported quarter are expected to grow 12.3% year over year.
Dycom Industries DY has an Earnings ESP of +1.24% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
DY’s earnings topped the consensus mark in all the last four quarters, the average being 147.4%. Earnings for the to-be-reported quarter are expected to increase 4.7% year over year.
Construction Partners, Inc. ROAD has an Earnings ESP of +2.91% and sports a Zacks Rank #1.
ROAD’s earnings topped the consensus mark in three of the last four quarters, with the average being 10.6%. Earnings for the to-be-reported quarter are expected to rise 108% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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KBR, Inc. (KBR) : Free Stock Analysis Report
Dycom Industries, Inc. (DY) : Free Stock Analysis Report
Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report
Construction Partners, Inc. (ROAD) : Free Stock Analysis Report
