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Construction Stock Earnings Lineup on Feb 8: J, TMHC & MAS
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Despite supply-chain bottlenecks, material and labor constraints as well as project delays, the Zacks Construction sector has been performing pretty well of late. The sector has been banking on solid housing market dynamics, improvement in manufacturing and infrastructural activities, and operational efficiencies. These strengthening factors are likely to contribute to the upcoming results.
Also, broadly warmer temperature, drier weather, and solid demand from non-residential and infrastructural activities for both private and public project work are expected to have supported growth. Further, prudent cost-saving efforts, a disciplined approach in bidding, project management, strength in funding programs across the states, and higher demand for road repair and maintenance are expected to have benefited the companies’ quarterly performance.
Yet, higher raw material costs owing to supply chain disruptions are likely to have put pressure on margins. Additionally, higher land, labor and transportation costs may have been risks. While inflation may have limited margin upside, companies have been taking pricing actions, which should have helped them somewhat offset such headwinds.
Q4 Expectations
Per the latest Earnings Outlook, construction sector earnings are expected to grow 25.7% year over year for the to-be-reported quarter, indicating 470 basis points (bps) improvement from 21% growth registered in third-quarter 2021. Revenues are projected to increase 15.5% year over year, suggesting an improvement from 14.1% growth in the last reported quarter.
A Handful of Construction Stocks to Watch
A handful of companies from the construction space are likely to release their respective quarterly results on Feb 8. Let’s take a quick glance at how these stocks are poised ahead of their respective earnings release.
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.
Jacobs Engineering Group Inc. (J - Free Report) is slated to report first-quarter fiscal 2022 results before the opening bell. Fourth-quarter fiscal 2021 adjusted earnings beat the Zacks Consensus Estimate by 6% but revenues missed the same by 5.3%. On a year-over-year basis, revenues increased 1.9% but adjusted earnings were down 3% due to a lower tax rate. Shares of Jacobs have gained 17% in the past year. Its earnings topped the consensus mark in the trailing four quarters, with the average being 12.71%, as shown in the chart below:
Jacobs Engineering Group Inc. Price and EPS Surprise
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to $1.60 per share from $1.61 over the past seven days. Nonetheless, the estimated figure indicates a 13.5% increase from the year-ago earnings of $1.41 per share. Also, the consensus mark for revenues is $3.64 billion, suggesting 7.7% year-over-year growth.
This leading professional, technical and construction services provider has been banking on investments from the U.S. Infrastructure Act, strategic business transformation, higher-margin backlog, focus on digital and technological solutions, and solid project execution. Yet, an increase in medical costs, IT investments and other expenses may have been concerns. (Read more: What to Expect From Jacobs This Earnings Season)
Masco Corporation (MAS - Free Report) is slated to report fourth-quarter 2021 results before the opening bell. In the last reported quarter, the company’s top and bottom lines beat the Zacks Consensus Estimate by 4.7% and 13.8%, respectively. Net sales improved 11.1% on strong demand across the categories and channels but earnings declined 6.6% year over year, owing to supply chain constraints and inflation. Masco’s shares have gained 7.2% in the past year. Its earnings topped the consensus mark in the trailing four quarters, with the average being 14.9%, as shown in the chart below:
The chances of MAS delivering an earnings beat are high this time around as it has an Earnings ESP of +6.13% and a Zacks Rank #2.
The Zacks Consensus Estimate for Masco’s fourth-quarter earnings is pegged at 71 cents per share, implying a decline of 5.3% from the year-ago reported figure of 75 cents. Earnings estimates for the said period have moved 1.4% north in the past seven days, reflecting analysts’ optimism over the company’s growth potential. The consensus estimate for net sales stands at $1.98 billion, indicating a 6.2% increase from the prior-year period.
This leading home improvement and building products company has been benefiting from solid demand for housing and building material products and regular acquisitions. Yet, supply chain issues and intense inflationary pressure, particularly on commodity and logistics, are likely to have put pressure on the bottom line. (Read more: Intense Inflationary Pressure to Ail Masco Q4 Earnings)
Taylor Morrison Home Corporation (TMHC - Free Report) is slated to report fourth-quarter 2021 results before market open. For the third quarter, earnings and revenues surpassed the Zacks Consensus Estimate by 10.7% and 1.1%, respectively. On a year-over-year basis, revenues grew 9.4% and earnings jumped a whopping 54% on the back of solid housing demand, acquisition synergies and production efficiencies. TMHC’s shares have gained 10.6% in the past six months. TMHC’s earnings lagged the consensus mark in three of the trailing four quarters, with the average negative surprise being 2.2%, as shown in the chart below:
Taylor Morrison Home Corporation Price and EPS Surprise
Our proven model does not conclusively predict an earnings beat for TMHC 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 earnings of $2.09 per share indicates a 190.3% improvement from the year-ago figure of 72 cents. The Zacks Consensus Estimate for revenues is pegged at $2.63 billion, suggesting 68.7% year-over-year growth.
Despite strong demand across end-markets served, the company’s profitability is likely to have been hurt by industry-wide material and labor bottlenecks as well as inventory shortages. That said, product refinement, process streamlining and asset-lighter land investments strategies, a solid economic backdrop, operational excellence and capital efficiency are expected to have driven its performance in the to-be-reported quarter.
Image: Bigstock
Construction Stock Earnings Lineup on Feb 8: J, TMHC & MAS
Despite supply-chain bottlenecks, material and labor constraints as well as project delays, the Zacks Construction sector has been performing pretty well of late. The sector has been banking on solid housing market dynamics, improvement in manufacturing and infrastructural activities, and operational efficiencies. These strengthening factors are likely to contribute to the upcoming results.
Also, broadly warmer temperature, drier weather, and solid demand from non-residential and infrastructural activities for both private and public project work are expected to have supported growth. Further, prudent cost-saving efforts, a disciplined approach in bidding, project management, strength in funding programs across the states, and higher demand for road repair and maintenance are expected to have benefited the companies’ quarterly performance.
Yet, higher raw material costs owing to supply chain disruptions are likely to have put pressure on margins. Additionally, higher land, labor and transportation costs may have been risks. While inflation may have limited margin upside, companies have been taking pricing actions, which should have helped them somewhat offset such headwinds.
Q4 Expectations
Per the latest Earnings Outlook, construction sector earnings are expected to grow 25.7% year over year for the to-be-reported quarter, indicating 470 basis points (bps) improvement from 21% growth registered in third-quarter 2021. Revenues are projected to increase 15.5% year over year, suggesting an improvement from 14.1% growth in the last reported quarter.
A Handful of Construction Stocks to Watch
A handful of companies from the construction space are likely to release their respective quarterly results on Feb 8. Let’s take a quick glance at how these stocks are poised ahead of their respective earnings release.
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.
Jacobs Engineering Group Inc. (J - Free Report) is slated to report first-quarter fiscal 2022 results before the opening bell. Fourth-quarter fiscal 2021 adjusted earnings beat the Zacks Consensus Estimate by 6% but revenues missed the same by 5.3%. On a year-over-year basis, revenues increased 1.9% but adjusted earnings were down 3% due to a lower tax rate. Shares of Jacobs have gained 17% in the past year. Its earnings topped the consensus mark in the trailing four quarters, with the average being 12.71%, as shown in the chart below:
Jacobs Engineering Group Inc. Price and EPS Surprise
Jacobs Engineering Group Inc. price-eps-surprise | Jacobs Engineering Group Inc. Quote
Our proven model does not conclusively predict an earnings beat for J this time around as it has an Earnings ESP of -1.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has decreased to $1.60 per share from $1.61 over the past seven days. Nonetheless, the estimated figure indicates a 13.5% increase from the year-ago earnings of $1.41 per share. Also, the consensus mark for revenues is $3.64 billion, suggesting 7.7% year-over-year growth.
This leading professional, technical and construction services provider has been banking on investments from the U.S. Infrastructure Act, strategic business transformation, higher-margin backlog, focus on digital and technological solutions, and solid project execution. Yet, an increase in medical costs, IT investments and other expenses may have been concerns. (Read more: What to Expect From Jacobs This Earnings Season)
Masco Corporation (MAS - Free Report) is slated to report fourth-quarter 2021 results before the opening bell. In the last reported quarter, the company’s top and bottom lines beat the Zacks Consensus Estimate by 4.7% and 13.8%, respectively. Net sales improved 11.1% on strong demand across the categories and channels but earnings declined 6.6% year over year, owing to supply chain constraints and inflation. Masco’s shares have gained 7.2% in the past year. Its earnings topped the consensus mark in the trailing four quarters, with the average being 14.9%, as shown in the chart below:
Masco Corporation Price and EPS Surprise
Masco Corporation price-eps-surprise | Masco Corporation Quote
The chances of MAS delivering an earnings beat are high this time around as it has an Earnings ESP of +6.13% and a Zacks Rank #2.
The Zacks Consensus Estimate for Masco’s fourth-quarter earnings is pegged at 71 cents per share, implying a decline of 5.3% from the year-ago reported figure of 75 cents. Earnings estimates for the said period have moved 1.4% north in the past seven days, reflecting analysts’ optimism over the company’s growth potential. The consensus estimate for net sales stands at $1.98 billion, indicating a 6.2% increase from the prior-year period.
This leading home improvement and building products company has been benefiting from solid demand for housing and building material products and regular acquisitions. Yet, supply chain issues and intense inflationary pressure, particularly on commodity and logistics, are likely to have put pressure on the bottom line. (Read more: Intense Inflationary Pressure to Ail Masco Q4 Earnings)
Taylor Morrison Home Corporation (TMHC - Free Report) is slated to report fourth-quarter 2021 results before market open. For the third quarter, earnings and revenues surpassed the Zacks Consensus Estimate by 10.7% and 1.1%, respectively. On a year-over-year basis, revenues grew 9.4% and earnings jumped a whopping 54% on the back of solid housing demand, acquisition synergies and production efficiencies. TMHC’s shares have gained 10.6% in the past six months. TMHC’s earnings lagged the consensus mark in three of the trailing four quarters, with the average negative surprise being 2.2%, as shown in the chart below:
Taylor Morrison Home Corporation Price and EPS Surprise
Taylor Morrison Home Corporation price-eps-surprise | Taylor Morrison Home Corporation Quote
Our proven model does not conclusively predict an earnings beat for TMHC 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 earnings of $2.09 per share indicates a 190.3% improvement from the year-ago figure of 72 cents. The Zacks Consensus Estimate for revenues is pegged at $2.63 billion, suggesting 68.7% year-over-year growth.
Despite strong demand across end-markets served, the company’s profitability is likely to have been hurt by industry-wide material and labor bottlenecks as well as inventory shortages. That said, product refinement, process streamlining and asset-lighter land investments strategies, a solid economic backdrop, operational excellence and capital efficiency are expected to have driven its performance in the to-be-reported quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.