Vulcan Materials Company ( VMC Quick Quote VMC - Free Report) is scheduled to release fourth-quarter 2020 results on Feb 16, before the opening bell. In the last reported quarter, the company’s adjusted earnings and revenues missed the Zacks Consensus Estimate by 4.3% and 4.8%, respectively. On a year-over-year basis, earnings and revenues decreased 7.1% and 7.2%, respectively. Vulcan Materials’ earnings topped the consensus mark in two of the last four quarters and missed the same on the other two occasions, with the average surprise being 5.7%. Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been unchanged over the past 30 days at 99 cents. This indicates a decrease of 8.3% from the year-ago quarter. The consensus estimate for revenues is pegged at $1.14 billion, suggesting a 3.9% year-over-year decline.
Factors to Note
Vulcan Materials is expected to have generated lower earnings and revenues on a year-over-year basis in the fourth quarter, given weakness in non-residential construction activities. Also, headwinds from California wildfires are expected to reflect on fourth-quarter results.
However, strong residential construction activity and milder weather conditions that led to the extension of the construction season are likely to have supported the company’s top line. Its business and earnings are sensitive to changes in construction spending, particularly housing and public construction in the Southeast, Texas, and California. Also, Vulcan Materials has a sizable presence in the South. Higher spending (compared with the third quarter) from a number of states that the company serves is likely to have aided the company’s revenues. Notably, publicly-funded construction accounts for significant part (approximately 45-55%) of Vulcan Materials’ total aggregate shipments. The Aggregates business (including crushed stone, sand and gravel, along with other aggregates) has been a major contributor to revenue growth. Also, efforts to enhance operational excellence, acquisition synergies and cost-control measures are expected to have aided the bottom line to some extent. While volumes are likely to have been under pressure, the aggregates unit margins are expected to have improved, given higher prices and lower diesel fuel costs. The Zacks Consensus Estimate for net sales from the Aggregates segment (accounting for 81% of total revenues) is pegged at $936 million, indicating a decrease from $960 million a year ago. The consensus mark for net sales from the Concrete segment (accounting for 8% of total revenues) is $91 million, suggesting a decline from $95 million a year ago. The Zacks Consensus Estimate for the same from the Asphalt Mix segment (17% of total revenues) is pegged at $192 million, indicating fall from $206 million a year ago. The consensus mark for Calcium segment’s net sales is $2.08 million, suggesting a decrease from $2.12 million a year ago. What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Vulcan Materials this time around. The combination of a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +2.41%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Zacks Rank: Vulcan Materials currently carries a Zacks Rank #4 (Sell). You can see . the complete list of today’s Zacks #1 Rank stocks here Stocks Worth a Look
Here are some 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. Owens Corning Inc. ( OC Quick Quote OC - Free Report) has an Earnings ESP of +3.24% and holds a Zacks Rank #2. Primoris Services Corporation ( PRIM Quick Quote PRIM - Free Report) has an Earnings ESP of +4.55% and carries a Zacks Rank #1. Trex Company, Inc. ( TREX Quick Quote TREX - Free Report) has an Earnings ESP of +2.07% and carries a Zacks Rank #3. +1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
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