Back to top

Image: Shutterstock

Masco (MAS) Gears up to Post Q4 Earnings: Is a Beat in Store?

Read MoreHide Full Article

Masco Corporation (MAS - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 8, before the opening bell.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 9.9% and rose 1% year over year. On the contrary, net sales slightly missed the consensus mark and declined 10% year over year.

Masco’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, the average surprise being 16.6%.

The Trend in Estimate Revision

The Zacks Consensus Estimate for Masco’s fourth-quarter earnings is pegged at 66 cents per share, suggesting a rise of 1.5% from the year-ago quarter’s reported figure of 65 cents.

Masco Corporation Price and EPS Surprise

 

Masco Corporation Price and EPS Surprise

Masco Corporation price-eps-surprise | Masco Corporation Quote

The consensus estimate for net sales is pegged at $1.77 billion, indicating a 7.7% decrease from the prior-year quarter’s figure.

Factors to Note

Masco’s fourth-quarter earnings are expected to have improved marginally amid a year-over-year net sales decline due to softness across the business. Moreover, currency fluctuations and economic instability in key markets are additional concerns affecting sales and export business. Nonetheless, the company’s solid brand portfolio, long-term growth initiatives and expansion efforts are expected to partially offset the adverse effects of these headwinds.

Geographically, for fourth-quarter 2023, our model predicts North America (accounted for 80.9% of third-quarter total revenues) and International, mainly Europe (accounted for 19.1% of third-quarter total revenues) revenues to have declined 9.6% and 5.1% year over year to $1.4 billion and $356.7 million, respectively.

Segment-wise, our estimates suggest the Plumbing Products (accounted for 60.2% of third-quarter total revenues) and Decorative Architectural Products segments’ (accounted for 39.8% of third-quarter total revenues) revenues to have declined 9.1% and 8.1% year over year to $1.09 billion and $668.3 million, respectively.

Meanwhile, the company's bottom line is likely to have improved slightly on a favorable price/cost relationship and cost-saving initiatives. For the fourth quarter, our model predicts consolidated adjusted operating margin to expand 90 basis points year over year to 13.1%.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Masco 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. That is not the case here.

Currently, MAS has a Zacks Rank #4 (Sell) and an Earnings ESP of -1.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

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

Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +8.24% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LPX’s earnings for the to-be-reported quarter are expected to have declined 14.8% year over year. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 98.3%.

Vulcan Materials Company (VMC - Free Report) currently has an Earnings ESP of +1.85% and a Zacks Rank #3.

VMC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, delivering an average surprise of 13.6%. Earnings for the to-be-reported quarter are expected to grow 25.9% year over year.

Floor & Decor Holdings, Inc. (FND - Free Report) has an Earnings ESP of +7.37 and a Zacks Rank #2 at present.

FND’s earnings for the to-be-reported quarter are expected to decline 57.8% year over year. The company's earnings beat the consensus mark in two of the trailing four quarters, met in one and missed in the other, delivering an average surprise of 4.9%.

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

Published in