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Eagle Materials (EXP - Snapshot Report) has seen a dramatic rise in earnings estimates making it a Zacks #1 Rank (Strong Buy).
Eagle Materials Inc. produces building materials and construction
products used in residential, industrial and commercial
construction. Products include Cement, Gypsum Wallboard, Recycled
Paperboard, and Concrete and Aggregates. These products are used
primarily in commercial and residential construction, public
construction projects, and projects to build, expand, and repair
roads and highways. The company, formerly known as Centex
Construction Products, Inc., was founded in 1963 and is based in
Eagle Materials Beat In Three of the Last Five Quarters
Eagle Materials has topped earnings estimates in three of the last
five quarters. Over the course of those three beats,
the company has topped the Zacks Consensus Estimate by an average
of $0.05, and the percent beat averages out to be 68%. Those are
some heavy duty beats! The stock, however, has only moved higher
following one of the positive earnings surprises.
In the September 2011 quarter, the stock rose 10.8% following a
17% miss on the bottom line. The company reported earnings of
$0.14, $0.03 less than the Zacks Consensus Estimate and were
lower than year ago levels. Revenues of $135 million were $3
million less than the Zacks Consensus Estimate but did show an
increase of $3 million from the year ago period.
Eagle Materials Most Recent Reported Earnings
On February 2, 2012 Eagle Materials reported revenue of $124
million, roughly $11 million ahead of the Zacks Consensus Estimate
and up from $104 million reported in year ago quarter. In
addition, earnings per
share came in at $0.20, $0.08 higher than
the Zacks Consensus Estimate of $0.12. The beat of 66% helped to
propel the stock higher by 10.5% in the session following the
Eagle Materials Expected to Report Earnings
Eagle Materials is expected to report earnings on May 16, 2012.
Consensus Estimate is calling for revenue of $116 million and EPS
of $0.23. The year ago period saw revenue of $95 million and EPS
of $0.00, or a break even quarter. Following the release last
year, the stock moved
lower by 2.8%.
Eagle Materials Sees Estimates Moving Higher
Eagle Materials has seen earnings estimates for 2012 move higher
in five of the last six months. Starting at $0.81 in December
2011, analysts have increased estimates to $0.89 in January 2012
and then huge jump to $1.31 in February. March saw another slight
bump up to $1.35 and April also saw an increase to $1.43. That is
an increase of more than 76%. Aggressive growth investors look
for earnings growth like this, but rarely find it.
The valuation for Eagle Materials has the stock trading at 26x
forward earnings compared to the industry average of 27x. The
price to book multiple of 3.6x is well above the 1.7x industry
average and the price to sales multiple also sees similar premium
of 3.5x compared to 1.5x for the industry average.
The price and consensus chart shows us that the company had a
challenging three years from 2009 to 2011. Estimates started high
in each of those years and finished lower. Lower estimates almost
always lead to lower stock prices and that is exactly what
happened to Eagle Materials. The company was able to turn that
story around and earnings estimates for 2012 and 2013 have moved
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor
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