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Masco (MAS) to Report Q3 Earnings: What's in the Cards?

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Masco Corporation (MAS - Free Report) is scheduled to report third-quarter 2020 results on Oct 28, before the opening bell.

In the last reported quarter, the company’s revenues and earnings beat the Zacks Consensus Estimate by 4.2% and 18.3%, respectively. However, both the top and bottom lines declined 4.1% and 13.5%, respectively, on a year-over-year basis.

Q3 Estimates

The Zacks Consensus Estimate for Masco’s third-quarter earnings is pegged at 79 cents per share, indicating an improvement of 16.2% on a year-over-year basis. In the past 30 days, the Zacks Consensus Estimate for third-quarter earnings has been revised upward by 3.9%.

Factors to Note

Masco’s third-quarter revenues are likely to reflect robust performance of Decorative Architectural Products and Plumbing Products segments. The company expects total sales in the range of flat to up 10% in the third quarter. However, weakness in international market might have weighed on the to-be-reported quarter’s performance. Notably, the company’s international sales decreased 3% and 17% in the first quarter and second quarter, respectively, owing to lower volumes. The trend is likely to have continued in the quarter to be reported.

The Zacks Consensus Estimate for Plumbing Products’ sales of $1,022 million indicates growth of 1.6% year over year. The same for adjusted EBITDA is currently pegged at $216 million, which suggests an improvement of 3.8% from $208 million in the year-ago period. The segment has been benefiting from its portfolio expansion. In first-quarter 2020, Masco acquired entire share capital of SmarTap A.Y Ltd. ("SmarTap"), a developer of a smart bathing system that monitors and controls the temperature and flow of water. SmarTap is included in the Plumbing Products segment, which is likely to have contributed to the segment’s revenues in the third quarter.

The consensus mark for the Decorative Architectural Products segment’s sales is currently pegged at $797 million, suggesting year-over-year growth of 12.3%. The same for adjusted EBITDA stands at $174 million, indicating an improvement of 20% from the prior-year period.

Notably, the business is highly focused on repair and modelling activities. It has been enhancing the existing portfolio via regular inorganic moves, which allow it carry out operational improvements, improve go-to-market capabilities, and remove cyclical and lower-performing businesses.

Masco Corporation Price and EPS Surprise Masco Corporation Price and EPS Surprise

Masco Corporation price-eps-surprise | Masco Corporation Quote

Quantitative Model Prediction

Our proven model conclusively predicts an earnings beat for Masco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Masco has an Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, of +2.23%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Masco currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Eagle Materials Inc. (EXP - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #3.

Aegion Corporation has an Earnings ESP of +5.26% and holds a Zacks Rank #3.

Owens Corning Inc. (OC - Free Report) has an Earnings ESP of +12.46% and carries a Zacks Rank #1.

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