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What's in Store for Century Communities' (CCS) Q2 Earnings?

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Century Communities (CCS - Free Report) is scheduled to report second-quarter 2021 results on Jul 28, after market close.

In the last reported quarter, the company’s earnings and sales beat the Zacks Consensus Estimate by 97.4% and 26.7%, Moreover, the top and the bottom line increased 90% and 67.4% on a year-over-year basis, respectively. Also, the company surpassed earnings expectations in the six trailing quarters, the average being 54.8%. The upside was driven by strong housing market demand trends for new homes, increased home delivery and appreciation in average sale price.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has moved 1.1% down to $2.82 over the past 30 days. Nonetheless, the estimated figure indicates an increase of 133% from $1.21 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $1.01 billion, suggesting 29.8% growth from the year-ago reported figure of $776.4 million.

Factors to Consider

The company’s earnings and revenues for second-quarter 2021 are expected to have been driven by the rapidly growing demand for new homes along with tight supply and considerably low mortgage interest rates. Backed by the exceptional housing fundamentals, Century Communities is likely to have witnessed accelerated demand in the quarter to be reported. Also, the uptick in home sales can be majorly attributed to increase in home deliveries.

Century Communities’ robust backlog and strong pipeline of land and controlled lots are likely to have supported increased deliveries, contracts and community count across Century Communities and Century Complete brands during the quarter.  For second-quarter 2021, the company is much optimistic about the improved sales owing to the increase in deliveries and solid home price appreciation. Notably, the company is likely to have witnessed higher average sale price during the to-be reported quarter on higher demand across markets.

For second-quarter 2021, the Zacks Consensus Estimate for total homebuilding revenues is pegged at $984 million, implying an improvement of 31.1% from the year-ago period. The Zacks Consensus Estimate for net new home orders at second quarter-end is pegged at 3,060, indicating 14.9% growth year over year. The consensus estimate for average sales price of home deliveries is pegged at $344,000, suggesting a 14.3% rise from the year-ago quarter. Notably, the consensus estimate for number of home delivered for the second quarter is pegged at 2,837 units, suggesting 14.4% growth year over year.

Furthermore, Century Communities’ consistent focus on financial services is likely to have aided revenues during the quarter to be reported. The consensus mark for Financial Services revenues from Americas is pegged at $31 million that suggests a 20.6% increase from a year ago.

However, the company is witnessing elevated material costs and labor costs that are likely to have exerted pressure on the company’s second-quarter margins.

Century Communities, Inc. Price and EPS Surprise

Century Communities, Inc. Price and EPS Surprise

Century Communities, Inc. price-eps-surprise | Century Communities, Inc. Quote

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Century Communities this time around. 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. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Earnings ESP for Century Communities is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #4 (Sell).

Stocks With Favorable Combination

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

Owens Corning (OC - Free Report) has an Earnings ESP of + 14.56% and a Zacks Rank #2.

Quanta Services, Inc. (PWR - Free Report) has an Earnings ESP of +10.32% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +4.89% and a Zacks Rank #2.

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