Back to top

Image: Bigstock

Sterling (STRL) to Report Q1 Earnings: What's in the Offing?

Read MoreHide Full Article

Sterling Construction Company, Inc. (STRL - Free Report) is scheduled to report first-quarter 2022 results on May 2, after the closing bell.

In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 27% and increased a whopping 135% year over year. Net sales increased 15.3% year over year and topped the consensus mark by 18%, thanks to broad-based growth across the E-Infrastructure, Building and Transportation solutions segments.

The Trend in Estimate Revision

The Zacks Consensus Estimate for Sterling’s first-quarter earnings is pegged at 42 cents per share, suggesting a rise of 13.5% from the year-ago quarter’s figure of 37 cents. The consensus estimate for revenue is pegged at $371.8 million, indicating a 17.9% increase from the prior-year quarter’s figure.

Sterling Construction Company Inc Price and EPS Surprise

 

Sterling Construction Company Inc Price and EPS Surprise

Sterling Construction Company Inc price-eps-surprise | Sterling Construction Company Inc Quote

 

Factors to Note

Focus on higher-margin and lower-risk projects and transforming business from a heavy highway construction company to a leading specialty infrastructure provider is expected to have aided Sterling in the first quarter. Its diversified portfolio, including Transportation Solutions, E-Infrastructure Solutions and Building Solutions units, is likely to have added to the tailwinds. STRL has been executing a robust pipeline of projects for large, high-profile customers who are building new distribution centers, data centers and warehouses.

Yet, ongoing supply chain and inflation challenges, seasonality, risk of material delays and weather woes might have dented performance.

The e-infrastructure Solutions segment is likely to have gained from bolt-on acquisitions. The pandemic has accelerated demand and increased the size and scope of e-commerce distribution and data center projects, strategically aligning with the company’s strategy. Yet, inflationary pressure ails.

Its Building Solutions segment is likely to have witnessed strong demand from the residential market. The segment has been experiencing supply-chain issues, specifically related to the cost of concrete, lumber and steel, due to which management announced multiple price increases. These headwinds might put pressure on first-quarter results.

The Transportation Solutions segment is likely to have witnessed higher heavy highway and aviation projects in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model doesn’t not conclusively predicts an earnings beat for Sterling 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, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, STRL has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Weyerhaeuser Company (WY - Free Report) has an Earnings ESP of +9.65% and a Zacks Rank #2.

Shares of Weyerhaeuser have gained 63% over the past year. WY’s earnings topped the consensus mark twice but missed the same on two occasions, with the average being 1.6%.

KBR, Inc. (KBR - Free Report) has an Earnings ESP of +6.64% and a Zacks Rank #3.

Shares of KBR have gained 69.8% over the past year. KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.4%.

Martin Marietta Materials, Inc. (MLM - Free Report) has an Earnings ESP of +9.30% and a Zacks Rank #3.

Shares of Martin Marietta have gained 31.1% over the past year. In the trailing four quarters, MLM’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average surprise being 28%.

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