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Martin Marietta (MLM) Q1 Earnings: Disappointment in Store?

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Martin Marietta Materials, Inc. (MLM - Free Report) is set to report first-quarter 2017 results on May 2, before the market opens.

Last quarter, the company posted a negative earnings surprise of 6.6%. Meanwhile, in spite of missing estimates in three of the past four quarters, the company has an average positive surprise of 25.85%, owing to a stellar beat in the first quarter of 2016.

Let’s see how things are shaping up for this announcement.

Factors to Consider

Despite improving economic conditions, cost management and enhanced operational efficiency, Martin Marietta’s growth prospects are getting affected by delays in Texas Department of Transportation projects and decline in railroad ballast shipments. Also, the company’s businesses are subjected to weather-related risks that can significantly affect production schedules and profitability. The first and fourth quarters are most affected by winter. Notably, the Zacks Consensus Estimate for revenues is pegged at $724.4 million, hinting at a 1.3% drop.

However, we remain encouraged by the positive trends witnessed in the private and public sector construction markets of late. Sustained growth in construction activity increases the demand for both the aggregates as well as cement businesses of the company. For the first quarter, the Zacks Consensus Estimate for earnings is pegged at 66 cents, reflecting a 4.7% year-over-year decrease.

Earnings Whispers

Our proven model does not conclusively show that Martin Marietta 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) for this to happen. But that is not the case here, as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zacks ESP: The Earnings ESP is -21.21% as the Most Accurate estimate is pegged at 52 cents, while the Zacks Consensus Estimate is higher at 66 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Martin Marietta Materials, Inc. Price and EPS Surprise

 

Zacks Rank: Martin Marietta has a Zacks Rank #4 Sell). Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Peer Releases

D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the second quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 1.7% and 5.2%, respectively.

NVR, Inc. (NVR - Free Report) reported first-quarter 2017 earnings of $25.12 per share, surpassing the Zacks Consensus Estimate by 27.3%. The reported figure also rose 59% from the year-ago profit level.

Upcoming Release in the Sector

Louisiana-Pacific Corp. (LPX - Free Report) is scheduled to release its quarterly numbers on May 5. The Zacks Consensus Estimate for earnings is pegged at 29 cents, highlighting an increase of 319.1% on a year-over-year basis.

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