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Vulcan Materials (VMC) Q3 Earnings: What's in the Cards?
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Vulcan Materials Company (VMC - Free Report) is scheduled to report third-quarter 2016 results on Nov 2, before the opening bell.
Last quarter, Vulcan Materials posted a 10.89% negative surprise.
In fact, the producer of construction aggregates and other construction materials surpassed earnings estimates in three of the last four quarters, with an average surprise of 86.44%.
Let’s see how things are shaping up prior to this announcement.
Following a strong first-quarter performance, Vulcan Materials reported softer second-quarter results. While profits were strong, sales slowed down in the quarter. Shipments in the quarter were hurt by an extremely wet weather in several key markets and slower-than-expected start to large projects, both public and private. Shipments fell 5% in the month of May, while it rose approximately 8% and 6% in April and June, respectively.
With improvement in the economy and job scenario, non-residential construction and housing strengthened in 2016. Both demand and pricing momentum remained strong in the first half of 2016 and the trend is expected to continue in the second half.
That said, though demand trends remained strong in the second quarter, aggregates shipments (volumes) increased 3% year over year, much less than 17% in the first quarter.
Though the company reaffirmed its aggregates 2016 shipment guidance, it cautioned that achieving the plan will need favorable weather in the second half and ramping up of large infrastructure project work. As it is, unfavorable weather conditions usually shorten the construction season in the fourth quarter, which may hurt volume trends.
Moreover, construction labor shortages and other bottlenecks are partly affecting demand.
Earnings Whispers
Our proven model does not conclusively show that Vulcan Materials will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is pegged at -3.57%. This is because the Most Accurate estimate is $1.08 while the Zacks Consensus Estimate is slightly higher at $1.12. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Vulcan Materials has a Zacks Rank #5 (Strong Sell). Please note that we caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies in the broader construction sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:
The company is slated to release fourth-quarter fiscal 2016 results on Nov 14.
Quanta Services, Inc. (PWR - Free Report) , with an earnings ESP of +1.96% and a Zacks Rank #2. The company will likely release third-quarter 2016 results on Nov 3.
Summit Materials, Inc. (SUM - Free Report) , with an earnings ESP of +4.11% and a Zacks Rank #3. The company will report third-quarter 2016 results on Nov 2.
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Vulcan Materials (VMC) Q3 Earnings: What's in the Cards?
Vulcan Materials Company (VMC - Free Report) is scheduled to report third-quarter 2016 results on Nov 2, before the opening bell.
Last quarter, Vulcan Materials posted a 10.89% negative surprise.
In fact, the producer of construction aggregates and other construction materials surpassed earnings estimates in three of the last four quarters, with an average surprise of 86.44%.
Let’s see how things are shaping up prior to this announcement.
VULCAN MATLS CO Price and EPS Surprise
VULCAN MATLS CO Price and EPS Surprise | VULCAN MATLS CO Quote
Factors at Play
Following a strong first-quarter performance, Vulcan Materials reported softer second-quarter results. While profits were strong, sales slowed down in the quarter. Shipments in the quarter were hurt by an extremely wet weather in several key markets and slower-than-expected start to large projects, both public and private. Shipments fell 5% in the month of May, while it rose approximately 8% and 6% in April and June, respectively.
With improvement in the economy and job scenario, non-residential construction and housing strengthened in 2016. Both demand and pricing momentum remained strong in the first half of 2016 and the trend is expected to continue in the second half.
That said, though demand trends remained strong in the second quarter, aggregates shipments (volumes) increased 3% year over year, much less than 17% in the first quarter.
Though the company reaffirmed its aggregates 2016 shipment guidance, it cautioned that achieving the plan will need favorable weather in the second half and ramping up of large infrastructure project work. As it is, unfavorable weather conditions usually shorten the construction season in the fourth quarter, which may hurt volume trends.
Moreover, construction labor shortages and other bottlenecks are partly affecting demand.
Earnings Whispers
Our proven model does not conclusively show that Vulcan Materials will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is pegged at -3.57%. This is because the Most Accurate estimate is $1.08 while the Zacks Consensus Estimate is slightly higher at $1.12. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Vulcan Materials has a Zacks Rank #5 (Strong Sell). Please note that we caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies in the broader construction sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:
AECOM (ACM - Free Report) , with an earnings ESP of +4.11% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is slated to release fourth-quarter fiscal 2016 results on Nov 14.
Quanta Services, Inc. (PWR - Free Report) , with an earnings ESP of +1.96% and a Zacks Rank #2. The company will likely release third-quarter 2016 results on Nov 3.
Summit Materials, Inc. (SUM - Free Report) , with an earnings ESP of +4.11% and a Zacks Rank #3. The company will report third-quarter 2016 results on Nov 2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>