Back to top

Image: Bigstock

Century Communities (CCS) to Post Q3 Earnings: What's in Store?

Read MoreHide Full Article

Century Communities (CCS - Free Report) is scheduled to report third-quarter 2021 results on Oct 27, after market close.

In the last reported quarter, the company’s sales and earnings beat the Zacks Consensus Estimate by 3.5% and 23%, increasing 34.3% and 186.8% on a year-over-year basis, respectively. Markedly, the company beat earnings expectations in the last four quarters, the average being 59.2%. The upside was driven by strong housing market demand trends, increased home delivery and operational excellence.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings per share has moved 3.2% down to $3.03 over the past seven days for the quarter to be reported. Nevertheless, the estimated figure indicates an increase of 104.7% from $1.48 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $1.01 billion, suggesting 26.6% growth from the year-ago reported figure of $794.4 million.

Factors to Consider

The company’s earnings and revenues for third-quarter 2021 are expected to have improved year over year, backed by robust demand for new homes, including net new contracts, increased home deliveries, and higher average sales price (ASP). The uptick in home sales can be primarily attributed to higher home deliveries backed by the overall positive industry dynamics.

Furthermore, for the third quarter, Century Communities is expected to have witnessed high business growth due to its platform's operational efficiencies. A robust backlog level and improved number of controlled inventories are likely to have supported the increased number of home deliveries for third-quarter 2021 under the Century Communities and Century Complete brands.

The Zacks Consensus Estimate for third-quarter 2021 ASP of home deliveries is pegged at $364 million, suggesting an increase of 0.3% sequentially and 9.3% year over year. The consensus estimate for Net New Home Orders is pegged at 2,870 units, indicating a 22.4% decline year over year. Notably, the Zacks Consensus Estimate for the number of homes delivered for the third quarter is pegged at 2,677 units, suggesting a 3.4% sequential decline from 2,771 homes. Nonetheless, the estimated figure calls for 17.3% growth year over year.

However, the company is witnessing a rise in raw material costs that is expected to have materially impacted third-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 +1.49%. 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 an earnings beat in the quarters to be reported.

KBR, Inc. (KBR - Free Report) has an Earnings ESP of +2.66% and carries a Zacks Rank #2.

Otis Worldwide Corporation (OTIS - Free Report) has an Earnings ESP of +0.91% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3.