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Construction Stocks' Q2 Earnings on Jul 29: MLM, MAS & ASPN

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The Zacks Construction sector has performed pretty well so far this earnings season. The sector mainly benefited from solid housing market dynamics, robust repair and remodeling (R&R) activities, and a boost in infrastructural and public construction spending.

Meanwhile, a number of project awards across multiple business segments — including communications, transmission and power — as well as other infrastructural projects in domestic and international markets are likely to have contributed significantly to the companies’ performance. Again, increasing defense spending in major economies like the United States, rising public investments in water infrastructure and utility plants as well as encouraging prospects in the healthcare market are expected to have acted as tailwinds.

A volatile lumber market, lack of adequate supply, material and labor woes along with higher transportation costs pushed average home prices higher as well as reduced orders. The recent housing statistics were tepid owing to these headwinds. These headwinds might have also put pressure on the companies’ margins and performance.

Per the latest Earnings Outlook, construction sector earnings are expected to grow 61.5% year over year for the second quarter, indicating an increase from 58% growth registered in the first quarter. Revenues are projected to increase 22.9% year over year, suggesting an improvement from 10.3% growth in the last reported quarter.

A Look at Recent Earnings Releases

Some notable construction companies like UFP Industries, Inc. (UFPI - Free Report) , D.R. Horton, Inc. (DHI - Free Report) , Otis Worldwide Corporation (OTIS - Free Report) and PulteGroup, Inc. (PHM - Free Report) recently reported impressive second-quarter 2021 numbers.

UFP Industries reported impressive second-quarter 2021 results, wherein earnings and revenues not only surpassed the Zacks Consensus Estimate but also improved significantly on a year-over-year basis.

D.R. Horton reported impressive results for third-quarter fiscal 2021. Both the top and bottom lines topped the Zacks Consensus Estimate as well as improved significantly on a year-over-year basis.

Otis reported solid second-quarter 2021 results, with earnings and revenues not only topping the Zacks Consensus Estimate but also improving on a year-over-year basis. Solid organic sales in both New Equipment and Service segments, higher operating margins along with a lower effective tax rate benefited the company.

PulteGroup reported second-quarter 2021 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same. Nonetheless, both earnings and revenues grew year over year buoyed by solid housing market momentum along with limited inventory of new and existing homes.

A handful of companies from the construction space are likely to release their respective quarterly numbers this week.

Sneak Peek Into Upcoming Earnings Releases

Let’s take a quick glance at how the following construction stocks are poised ahead of their second-quarter earnings releases on Jul 29.

According to the Zacks model, 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Martin Marietta Materials, Inc. (MLM - Free Report) is slated to report quarterly results before the opening bell. First-quarter 2021 earnings and revenues (products and services) topped the Zacks Consensus Estimate by 108% and 1.8%, respectively.

Our proven model, though, does not conclusively predict an earnings beat for the company as it has an Earnings ESP of -1.26% and a Zacks Rank #3.

The Zacks Consensus Estimate for second-quarter earnings has decreased to $3.91 from $3.95 per share over the past seven days. Nonetheless, the estimated figure suggests a 12% increase from $3.49 per share reported in the year-ago period. The consensus mark for revenues is pegged at $1.29 billion, which calls for 8.8% growth from the prior-year reported figure. (Read more: Higher Pricing to Aid Martin Marietta's Q2 Earnings)

Masco Corporation (MAS - Free Report) is slated to report quarterly results before the opening bell. In the last reported quarter, the company’s top and bottom lines beat the Zacks Consensus Estimate by 7.8% and 34.9% as well as improved 22% and 89.3% year over year, respectively.

Masco Corporation Price and EPS Surprise

Masco Corporation Price and EPS Surprise

Masco Corporation price-eps-surprise | Masco Corporation Quote

The chances of Masco delivering an earnings beat are low this time around as it has an Earnings ESP of -2.99% and a Zacks Rank #4 (Sell).

The Zacks Consensus Estimate for Masco’s second-quarter earnings is pegged at $1.04 per share, implying growth of 23.8% from the year-ago reported figure. The consensus estimate for revenues stands at $2.17 billion, indicating a 23.1% increase from the prior-year reported number. (Read more: Masco to Report Q2 Earnings: What's in the Cards?)

Aspen Aerogels, Inc. (ASPN - Free Report) is slated to report quarterly results after the closing bell. In first-quarter 2021, it posted wider-than-expected loss of 22 cents per share. Nonetheless, revenues beat the consensus mark by 19.8%. Its earnings lagged the consensus estimate in the trailing three quarters, with the average negative surprise being 29.9%, as shown in the chart below:

Aspen Aerogels, Inc. Price and EPS Surprise

Aspen Aerogels, Inc. Price and EPS Surprise

Aspen Aerogels, Inc. price-eps-surprise | Aspen Aerogels, Inc. Quote

Our proven model does not conclusively predict an earnings beat for the company as it has an Earnings ESP of 0.00% and a Zacks Rank #3.

For the quarter to be reported, the Zacks Consensus Estimate for loss has widened over the past 30 days to 28 cents per share. The estimated figure indicates a 33.3% deterioration from the year-ago loss of 21 cents per share. The Zacks Consensus Estimate for revenues is pegged at $25.35 million, suggesting 2.9% year-over-year growth.

Solid Aerogel technology unit, a robust business development pipeline for PyroThin and Thermal barriers along with increased investments in R&D and new businesses are likely to have been more than offset by low demand in the refinery and petrochemical market, reduced average sales price as well as higher material costs.