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What's in Store for Sterling Construction (STRL) Q4 Earnings?

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Sterling Construction Company, Inc. (STRL - Free Report) is scheduled to report fourth-quarter 2020 results on Mar 2, after the closing bell. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 17%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 23 cents, indicating growth of 4.6% from the prior-year quarter. Over the past 30 days, earnings estimates have remained stable. The consensus mark for revenues stands at $341.3 million, suggesting decline of 1.5% from the year-ago reported number.

Factors to Note

The company’s fourth-quarter performance is likely to have benefited from robust Dallas and Houston residential markets. It is worth mentioning that the company’s largest customers remain optimistic about 2021.

Meanwhile, strong backlog, improved backlog margins and its diversification away from heavy highway have been favoring the company. The Zacks Consensus Estimate for the to-be-reported quarter’s contract backlog suggests growth of 10.9% year over year. Moreover, robust performances of specialty services and residential segments might have favored the to-be-reported quarter’s performance.

However, reduction in DOT budget in several states around the United States is likely to have negatively impacted the company’s heavy civil sector. In third-quarter 2020, heavy civil segment reported revenue decline of 8.1% year over year.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Sterling Construction 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: Sterling Construction has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Sterling Construction, which shares space with Dycom Industries, Inc. (DY - Free Report) , carries a Zacks Rank #3.

Stocks Poised to Beat Earnings Estimates

Here are some stocks worth considering from the Zacks Construction space as our model shows that these have the right combination of elements to beat earnings this season:

Winnebago Industries, Inc. (WGO - Free Report) has an Earnings ESP of +7.69% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Thor Industries, Inc. (THO - Free Report) has an Earnings ESP of +3.09% and a Zacks Rank #2.

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