Back to top

Analyst Blog

Zacks Investment Research downgraded Sterling Construction Co. Inc. (STRL - Snapshot Report) to a Zacks Rank #5 (Strong Sell) on Mar 25, 2014.

Why the Downgrade?

Sterling Construction reported fourth-quarter adjusted loss of $1.82 per share on Mar 17. Results compared unfavorably with earnings per share of 1 cent in the prior-year quarter as well as the Zacks Consensus Estimate of a loss per share of $1.47.

Sales plunged 20% year over year to $126 million in the quarter, missing the Zacks Consensus Estimate of $158 million by a wide margin. The decline was mainly due to write-downs in the current year on three projects in Texas, awarded prior to 2012, and the impact of weather-related delays and issues with subcontractors on these jobs. In contrast, the prior-year quarter had benefited from the completion of several large projects in Utah, particularly the I-15 CORE  Reconstruction Joint Venture Project.
Sterling Construction expects revenues in 2014 to be higher than 2013 and noted that the loss-making pre-2012 projects will be completed. At the end of first-quarter 2014, the loss-making projects, in aggregate, will be 96% complete. The favorable booking trend is expected to continue both in terms of revenue and gross margin.

Notwithstanding the somewhat improved outlook for 2014, Sterling Construction’s poor performance in the fourth quarter of 2013 triggered a downward revision in earnings estimates. In the last 7 days, the Zacks Consensus Estimate for 2014 has plunged 58% to 13 cents per share. For 2015, the Zacks Consensus Estimate has gone down 4% to 53 cents.

Other Stocks to Consider

Some better-performing stocks in the sector include Gibraltar Industries, Inc. (ROCK - Analyst Report), India Globalization Capital, Inc. (IGC) and MasTec, Inc. (MTZ - Analyst Report). While Gibraltar Industries sports a Zacks Rank #1 (Strong Buy), India Globalization Capital and MasTec hold a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%
NUSTAR GP H… NSH 41.14 +2.59%