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Peek in Construction Stocks Q2 Earnings on Aug 3: RYN & More
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The Q2 earnings season (or the quarter ended Jun 30, 2016) is past the halfway mark and several companies are scheduled to report their financial results this week. As of Jul 29, 2016, almost 60% of the S&P members have already reported their quarterly earnings.
Per the Zacks Earnings Trends report, this will likely be the fifth consecutive quarter to report earnings decline in spite of the sequential improvement in earnings. Interestingly, this quarter is seeing positive revenue growth and is currently outperforming the trend displayed in the preceding quarter. The Q2 earnings season is critical for investors to ascertain the most attractive picks as the market has begun to stabilize after Brexit, which shook the global economy in Jun 2016. Post Brexit, investors have become jittery and are resorting to safe haven stocks.
In this scenario, investing in the construction sector seems to be a good idea. The second quarter of 2016 has been impressive for the U.S construction sector.
Of the construction companies listed in the S&P 500 index, 53.8% have already reported their results. Almost, 57.1% of these companies have surpassed earnings estimates and 42.9% beat revenue expectations. Total earnings of these construction companies jumped 14.3% on 11.3% increase in revenues.
The recently released housing data has been fairly upbeat with reports of higher sales of new single-family houses coupled with mid-single-digit growth in housing starts. Further, a strong home remodeling market, along with strong job data and rising consumer confidence, is also doing the trick for these stocks.
So far, some of the leading homebuilding companies have reported their Q2 results. While the bottom line of companies like Pulte Group Inc. (PHM - Free Report) , Emcor Group Inc. (EME - Free Report) , Masco Corporation (MAS - Free Report) , Meritage Homes (MTH - Free Report) managed to beat estimates for the quarter, Vulcan Materials Company’s (VMC - Free Report) adjusted earnings missed the Zacks Consensus Estimate.
With more and more companies scheduled to report their Q2 numbers this week, let us look at how these four leading construction companies are placed ahead of their earnings release.
Real estate investment trust (“REIT”) Rayonier Inc. (RYN - Free Report) is expected to report Q2 earnings on Aug 3. The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3 (Hold). Though a favorable Zacks Rank #1(Strong Buy), 2 (Buy) or 3 increase the predictive power of an earnings beat, a 0.00% Earnings ESP complicates our surprise prediction. The company reported an average positive surprise of 5.16% for the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 3 cents per share for Q2.
Rayonier strives to improve the quality of its timberland holdings by divesting non-core timberlands and re-investing the proceeds in its core business. Further, geographic diversity and better pricing power due to favorable demand-supply dynamics bode well for the company. Moreover, recent developments in biogenetics and cloning, which have been helping in the rapid growth of trees, are expected to drive growth for the company. However, like other timberland REITs, Rayonier’s business is governed by rules of the federal and state forestry commissions. Hence, Rayonier has to comply with stricter regulatory requirements than other industries. Also, the volatility in timber prices and seasonality associated with forest products industry continue to pose risks for the company. (Read: What to Expect from Rayonier this Earnings Season?)
Construction company Summit Materials, Inc.(SUM - Free Report) is scheduled to report Q2 earnings on Aug 3. It carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. The company reported an average positive surprise of 10.58% in the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 44 cents per share for Q2.
Caesarstone Ltd. (CSTE - Free Report) is slated to report Q2 earnings on Aug 3. The company carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. Caesarstone reported a negative earnings surprise of 20.45% in the preceding quarter and an average negative surprise of 4.38% in the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 61 cents per share for Q2.
Building products company Continental Building Products, Inc. is set to report Q2 earnings on Aug 3. The company carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. It reported a positive earnings surprise of 87.50% in the preceding quarter and an average positive surprise of 17.71% for the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 29 cents per share for Q2. Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Don’t miss out on our full earnings release articles for these construction stocks, as the actual results might hold some surprises!
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Peek in Construction Stocks Q2 Earnings on Aug 3: RYN & More
The Q2 earnings season (or the quarter ended Jun 30, 2016) is past the halfway mark and several companies are scheduled to report their financial results this week. As of Jul 29, 2016, almost 60% of the S&P members have already reported their quarterly earnings.
Per the Zacks Earnings Trends report, this will likely be the fifth consecutive quarter to report earnings decline in spite of the sequential improvement in earnings. Interestingly, this quarter is seeing positive revenue growth and is currently outperforming the trend displayed in the preceding quarter. The Q2 earnings season is critical for investors to ascertain the most attractive picks as the market has begun to stabilize after Brexit, which shook the global economy in Jun 2016. Post Brexit, investors have become jittery and are resorting to safe haven stocks.
In this scenario, investing in the construction sector seems to be a good idea. The second quarter of 2016 has been impressive for the U.S construction sector.
Of the construction companies listed in the S&P 500 index, 53.8% have already reported their results. Almost, 57.1% of these companies have surpassed earnings estimates and 42.9% beat revenue expectations. Total earnings of these construction companies jumped 14.3% on 11.3% increase in revenues.
The recently released housing data has been fairly upbeat with reports of higher sales of new single-family houses coupled with mid-single-digit growth in housing starts. Further, a strong home remodeling market, along with strong job data and rising consumer confidence, is also doing the trick for these stocks.
So far, some of the leading homebuilding companies have reported their Q2 results. While the bottom line of companies like Pulte Group Inc. (PHM - Free Report) , Emcor Group Inc. (EME - Free Report) , Masco Corporation (MAS - Free Report) , Meritage Homes (MTH - Free Report) managed to beat estimates for the quarter, Vulcan Materials Company’s (VMC - Free Report) adjusted earnings missed the Zacks Consensus Estimate.
With more and more companies scheduled to report their Q2 numbers this week, let us look at how these four leading construction companies are placed ahead of their earnings release.
Real estate investment trust (“REIT”) Rayonier Inc. (RYN - Free Report) is expected to report Q2 earnings on Aug 3. The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3 (Hold). Though a favorable Zacks Rank #1(Strong Buy), 2 (Buy) or 3 increase the predictive power of an earnings beat, a 0.00% Earnings ESP complicates our surprise prediction. The company reported an average positive surprise of 5.16% for the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 3 cents per share for Q2.
RAYONIER INC Price and EPS Surprise
RAYONIER INC Price and EPS Surprise | RAYONIER INC Quote
Rayonier strives to improve the quality of its timberland holdings by divesting non-core timberlands and re-investing the proceeds in its core business. Further, geographic diversity and better pricing power due to favorable demand-supply dynamics bode well for the company. Moreover, recent developments in biogenetics and cloning, which have been helping in the rapid growth of trees, are expected to drive growth for the company. However, like other timberland REITs, Rayonier’s business is governed by rules of the federal and state forestry commissions. Hence, Rayonier has to comply with stricter regulatory requirements than other industries. Also, the volatility in timber prices and seasonality associated with forest products industry continue to pose risks for the company. (Read: What to Expect from Rayonier this Earnings Season?)
Construction company Summit Materials, Inc.(SUM - Free Report) is scheduled to report Q2 earnings on Aug 3. It carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. The company reported an average positive surprise of 10.58% in the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 44 cents per share for Q2.
SUMMIT MATERLS Price and EPS Surprise
SUMMIT MATERLS Price and EPS Surprise | SUMMIT MATERLS Quote
Caesarstone Ltd. (CSTE - Free Report) is slated to report Q2 earnings on Aug 3. The company carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. Caesarstone reported a negative earnings surprise of 20.45% in the preceding quarter and an average negative surprise of 4.38% in the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 61 cents per share for Q2.
CAESARSTONE LTD Price and EPS Surprise
CAESARSTONE LTD Price and EPS Surprise | CAESARSTONE LTD Quote
Building products company Continental Building Products, Inc. is set to report Q2 earnings on Aug 3. The company carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. It reported a positive earnings surprise of 87.50% in the preceding quarter and an average positive surprise of 17.71% for the trailing four quarters. The Zacks Consensus Estimate for earnings is currently pegged at 29 cents per share for Q2. Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
CONTL BLDG PRD Price and EPS Surprise
CONTL BLDG PRD Price and EPS Surprise | CONTL BLDG PRD Quote
Don’t miss out on our full earnings release articles for these construction stocks, as the actual results might hold some surprises!
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>