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Skyline (SKY) Warming Up to Q3 Earnings: What to Expect?

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Skyline Champion Corporation (SKY - Free Report) is set to release third-quarter fiscal 2022 results on Feb 2, 2022, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at 78 cents and $501.65 million, respectively.

This factory-built housing company posted better-than-expected earnings in the last reported quarter on higher-than-anticipated revenues from the U.S. Factory-Built Housing and Canadian Factory-Built Housing segments.

Skyline surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 48.3%. This is depicted in the graph below:

Skyline Corporation Price and EPS Surprise

Skyline Corporation Price and EPS Surprise

Skyline Corporation price-eps-surprise | Skyline Corporation Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for Skyline’s fiscal third-quarter earnings per share has been revised upward by 18 cents to 78 cents in the past 90 days. Moreover, this suggests an improvement over the year-ago quarter’s 38 cents per share. Also, the Zacks Consensus Estimate for revenues suggests a year-over-year rise of 32.9%.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Skyline for the to-be-reported quarter, as it does not have the right combination of the two key ingredients. A 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. However, this is not the case here, as elaborated below.

Earnings ESP: Skyline has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Skyline carries a Zacks Rank of 3 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

After being pulled down by surging raw material prices, increasing construction costs and rising mortgage rates, the housing sector is witnessing sustained recovery. It is also to be noted that despite the reopening of public transport like flights, the demand for recreational vehicles (RVs) has gone through the roof as people seem to be enjoying road trips more. Thus, Skyline, which designs, produces and distributes factory-built manufactured housing as well as RVs, is likely to have witnessed surging demand for its products in the to-be-reported quarter.

The Zacks Consensus Estimate for sales from the U.S. Factory-Built Housing segment is pegged at $460 million, indicating a jump from the $336 million recorded in the prior-year quarter. The Consensus Estimate for revenues from the Canadian Factory-Built Housing segment is pinned at $36 million, suggesting a rise from the $26.35 million reported in the last-year quarter.

However, the consensus metric for revenues from the Corporate/Other segment is pegged at $14.3 million, indicating a slight fall from the $14.87 reported in the corresponding quarter last year.

Moreover, Skyline is facing significant increases in certain material input costs, most significantly forest products. Additionally, the company is witnessing supply-chain disruption, higher freight costs and labor constraints. These factors are likely to put pressure on the firm’s cash flows and overall margins during the quarter.

Stocks With Favorable Combination

Here are a few other stocks in the Construction sector lined up to release quarterly results soon. Encouragingly, our model predicts earnings beats for these stocks:

Watsco (WSO - Free Report) has an Earnings ESP of +2.64% and a Zacks Rank #3. The stock is set to report fourth-quarter 2021 earnings on Feb 10.

The Zacks Consensus Estimate for Watsco’s to-be-reported quarter’s earnings and revenues is pegged at $1.71 per share and $1.36 billion, respectively. Encouragingly, WSO surpassed earnings estimates in the last four quarters, with an average of 21.34%.

Louisiana-Pacific (LPX - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #2. The stock is set to report fourth-quarter 2021 earnings on Feb 22.

The Zacks Consensus Estimate for Louisiana-Pacific’s to-be-reported quarter’s earnings and revenues is pegged at $1.86 per share and $846 million, respectively. LPX’s fourth-quarter earnings estimate has been revised upward by 3 cents in the last 30 days.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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