Yahoo Finance Watch These 5 Construction Stocks for Q1 Earnings: Beat or Miss?
The Zacks Construction sector has been seeing a positive earnings picture this time around. The sector has witnessed improved demand trends across the markets despite adverse weather conditions in early 2024.
Per the latest Earnings Trends report, the first-quarter earnings season has seen releases from approximately 53.8% of the total construction companies on the S&P 500 Index, capturing a total market cap of 57.6%. Of them, total earnings are up 15.1% from the year-ago period on 7.9% higher revenues, with 85.7% beating earnings per share (EPS) estimates and 42.9% beating revenue estimates.
The construction sector earnings are expected to rise 10.3% for the first quarter. This indicates growth from the fourth-quarter 2023 improvement rate of just 2.6%. Revenues are projected to increase 6.8%, suggesting an acceleration from 5.1% growth registered in the prior quarter.
Factors Shaping the Trend
The distinct trends across residential and non-residential markets are likely to shape the Zacks Construction sector's performance in the first quarter of 2024. Spending on new single-family construction projects have been balancing out the shortage of non-residential infrastructure projects in recent months.
The U.S. housing industry is still bearing the pressure of extremely high mortgage rates, which is haunting potential buyers to invest. So far in 2024, mortgage rates have relentlessly held between 6.6% and 7%. This apart, weather-related impacts and elevated labor costs might have hampered overall performance. To a relief, desire to own a new home amid limited availability of existing homes, encouraging repair and remodeling activities, and homebuilders' cost management efforts are likely to have contributed to growth.
The non-residential industry players might have benefited from strong global trends in infrastructure modernization, energy transition and national security. In fact, rising investments in telecommunications networks, especially in 5G technologies, environmental remediation and climate resilience, have had further support performance.
Utilizing the Zacks Stock Screener, we've singled out five stocks within the construction sector. These include Quanta Services, Inc. PWR, Vulcan Materials Company VMC, MasTec, Inc. MTZ, Howmet Aerospace Inc. HWM, and Frontdoor, Inc. FTDR, all scheduled for release on May 2.
Construction Stocks to Watch
Let’s take a quick glance at how these stocks are poised ahead of their respective earnings release.
One can narrow down the list with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they report with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks that have the best chances of coming up with an earnings beat in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Quanta Services — a leading national provider of specialty contracting services — topped earnings estimates in three of the trailing four quarters and missed on one occasion, with the average being 4.9%.
PWR is slated to report first-quarter results before the opening bell. The chances of PWR delivering an earnings beat are unlikely this time around as it has an Earnings ESP of -0.90% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its first-quarter EPS is pegged at $1.26, representing a rise of 1.6% from the year-ago reported figure. The consensus mark for revenues is $4.96 billion, suggesting an 11.9% year-over-year rise. (Read more: Quanta Services to Post Q1 Earnings: What to Expect)
Quanta Services, Inc. Price and EPS Surprise
Quanta Services, Inc. price-eps-surprise | Quanta Services, Inc. Quote
Vulcan — a construction aggregates company — topped earnings estimates in the trailing four quarters, with the average being 19.5%.
VMC is scheduled to report first-quarter results before the opening bell. VMC is unlikely to beat earnings this time as it has an Earnings ESP of -1.53% and a Zacks Rank #3.
The Zacks Consensus Estimate for its first-quarter EPS is pegged at 80 cents, representing a decrease of 15.8% from the year-ago reported figure. The consensus estimate for revenues is pegged at $1.53 billion, suggesting a 7.4% year-over-year decline. (Read more: Is Vulcan Stock Worth Buying Ahead of Q1 Earnings?)
Vulcan Materials Company Price and EPS Surprise
Vulcan Materials Company price-eps-surprise | Vulcan Materials Company Quote
MasTec — a leading infrastructure construction company — topped earnings estimates in three of the trailing four quarters and missed on one occasion, with the average being 1.2%.
MTZ is slated to report first-quarter results after the closing bell. MTZ has an Earnings ESP of 0.00% and a Zacks Rank #2, which does not conclusively predict an earnings beat this time around.
The Zacks Consensus Estimate for its first-quarter EPS is pegged at negative 47 cents, representing an improvement of 13% from the year-ago reported figure of negative 54 cents. The consensus mark for revenues is $2.62 billion, reflecting a 1.4% year-over-year improvement. MasTec has been benefiting from strong demand for its services across the Clean Energy and Infrastructure, Communications and Power Delivery segments. Oil and Gas also poses strength amid volatility in prices.
MasTec, Inc. Price and EPS Surprise
MasTec, Inc. price-eps-surprise | MasTec, Inc. Quote
Howmet Aerospace — an engineered solutions provider to the transportation and aerospace (both defense and commercial) industries — topped earnings estimates in the trailing four quarters, with an average of 8.8%.
HWM is scheduled to report first-quarter results before the opening bell. It is unlikely to beat earnings this time as it has an Earnings ESP of -3.18% and a Zacks Rank #3.
The Zacks Consensus Estimate for its first-quarter EPS is pegged at 52 cents, representing growth of 23.8% from the year-ago reported figure. The consensus mark for revenues is $1.74 billion, suggesting 8.8% year-over-year growth. (Read more: Howmet Aerospace to Post Q1 Earnings: What to Expect?)
Howmet Aerospace Inc. Price and EPS Surprise
Howmet Aerospace Inc. price-eps-surprise | Howmet Aerospace Inc. Quote
Frontdoor — a Memphis, TN-based home service provider — topped earnings estimates in the trailing four quarters, with the average being 336.6%.
FTDR is slated to report first-quarter results before the opening bell. The chances of FTDR delivering an earnings beat are high this time around as it has an Earnings ESP of +8.64% and sports a Zacks Rank #1.
The Zacks Consensus Estimate for its first-quarter EPS is pegged at 20 cents, representing a decline of 31% from the year-ago reported figure. The consensus estimate for revenues is pegged at $376.36 million, suggesting a 2.6% year-over-year increase. Frontdoor has been benefiting from strong price realization amid lower volumes. However, increased marketing investments to drive first-year direct-to-consumer customer count will likely impact the bottom line in the to-be-reported quarter.
Frontdoor Inc. Price and EPS Surprise
Frontdoor Inc. price-eps-surprise | Frontdoor Inc. Quote
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Quanta Services, Inc. (PWR) : Free Stock Analysis Report
Vulcan Materials Company (VMC) : Free Stock Analysis Report
MasTec, Inc. (MTZ) : Free Stock Analysis Report
Frontdoor Inc. (FTDR) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
