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West Fraser (WFG) to Post Q4 Earnings: What's in the Cards?

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West Fraser Timber Co. (WFG - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 15 after the closing bell.

Q3 Performance

In the last reported quarter, West Fraser’s earnings beat the Zacks Consensus Estimate and improved year over year. The company has surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 13.6%.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter earnings currently stands at $4.78, suggesting growth of 26.5% year over year. The earnings estimate has remained stable over the past 30 days.

Factors to Note

West Fraser’s fourth-quarter performance is likely to have benefited from housing demand and repair and remodeling activity. The most significant uses for its lumber and Oriented Strand Board (OSB) products are residential construction, repair and remodeling, and industrial applications. Reduced mortgage rates, low volumes of homes available for resale and the increasing trend of remote working have been driving demand for new housing in North America. Aging housing stock and repair and renovation spending have also been supportive of lumber, plywood and OSB demand.

In the fourth quarter, severe weather and flooding in British Columbia caused transportation disruptions to rail and truck routes, including limiting access to ports for overseas shipments. This might have impacted the company’s lumber shipments. Also, pulp shipments to the port of Vancouver, from where the company ships majority of its export pulp, have been less than normal. West Fraser has reduced operating schedules at multiple western Canadian locations and made adjustments as necessary in order to manage inventory levels, raw material supplies and integrated fiber supply chain.  This is likely to have impacted the company’s results in the quarter to be reported.

Higher labor costs and other input cost inflation and manufacturing costs might have weighed on the company’s margins in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for West Fraser this time around. The 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for WFG is 0.00%.

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

Price Performance

Zacks Investment ResearchImage Source: Zacks Investment Research

Shares of West Fraser have gained 37.9% over the past year, compared with the industry's rally of 8.9%.

Stocks Poised to Beat Estimates

Here are some Basic Materials stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Nutrien (NTR - Free Report) has an Earnings ESP of +2.61% and a Zacks Rank #1. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 indicates year-over-year growth of 858%.

Shares of Nutrien have appreciated 36.1% over the past year. NTR’s earnings beat the consensus mark in three of the trailing four quarters and missed once, the average surprise being 73.5%.

Huntsman Corporation (HUN - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank #2. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 suggests year-over-year growth of 72.5%.

Shares of Huntsman have gained 31.7% over the past year. HUN’s earnings topped the consensus mark in each of the trailing four quarters, the average surprise being 12.8%.

CF Industries (CF - Free Report) has an Earnings ESP of +7.34% and a Zacks Rank #3. The Zacks Consensus Estimate for the company’s earnings for the fourth quarter of 2021 indicates year-over-year growth of 752%.

Shares of CF Industries have gained 68.9% over the past year. CF’s earnings beat estimates in two of the trailing four quarters and missed twice, the average surprise being 97.8%.

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