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In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 41%, and revenues topped the same by 3.5%. On a year-over-year basis, earnings of this aggregates-based construction materials and contracting services provider increased 47% and revenues rose 12%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Knife River’s fourth-quarter earnings is pegged at 20 cents per share, which moved down from 29 cents in the past 60 days. The consensus estimate for net sales is pegged at $568.3 million.
Factors to Note
Knife River’s fourth-quarter earnings and revenues are expected to have aided by strong support from each region and double-digit price increases across all core product lines. Also, strong bidding strategies are anticipated to have elevated the contracting services backlog in the fourth quarter of 2023.
Knife River has effectively implemented its EDGE plan to enhance adjusted EBITDA margins and achieve strategic objectives. A crucial component of this strategy involves optimizing pricing to fully capture the value of core products, including aggregates, ready-mix concrete, asphalt, and contracting services. The company has adopted a more judicious approach in selecting higher-margin projects within its contracting services division. Pricing momentum, cost controls, and positive impacts from EDGE initiatives are likely to have added to the fourth-quarter results.
Also, inflation, higher liquid asphalt and diesel fuel costs, a rise in transportation and insurance costs, as well as labor costs, may have put pressure on the bottom line in the fourth quarter. Also, expenses related to higher repair and maintenance, supply and contract as well as supply-chain bottlenecks are added concerns.
For the Pacific segment, the consensus mark for revenues is currently pegged at $108 million, as rebounding market activity is driving all product lines. The segment has been benefiting from higher realized prices across its markets.
The same for Northwest unit is currently pegged at $121 million, aided by strong product pricing.
The consensus mark for the Mountain sector is currently pegged at $126 million, as strong commercial, residential and public agency activity within the contracting services business has been aiding it.
The consensus mark for North Central and All Other segments is currently pegged at $178 million and $35.6 million, respectively. Strong price increases across all product lines are likely to have aided the North Central results. Historically, strong market conditions in the Energy Services business, as well as improved materials market conditions in the South Region, are likely to have supported growth in All Other segment.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Knife River 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.
Currently, KNF has an Earnings ESP of 0.00% and a Zacks Rank #3. 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 other companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
OC’s earnings for the to-be-reported quarter are expected to increase 13.3%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 17.5%.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +8.24% and a Zacks Rank #3.
LPX’s earnings for the to-be-reported quarter are expected to decline 14.8%. 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%.
JELD-WEN Holding, Inc. (JELD - Free Report) has an Earnings ESP of +10.90% and has a Zacks Rank #3.
JELD’s earnings topped the consensus mark in each of the last four quarters, with the average being 126.5%. Earnings for the to-be-reported quarter are expected to decline 46.8% year over year.
Image: Bigstock
Knife River (KNF) to Report Q4 Earnings: Factors to Note
Knife River Corporation (KNF - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 15, before the opening bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 41%, and revenues topped the same by 3.5%. On a year-over-year basis, earnings of this aggregates-based construction materials and contracting services provider increased 47% and revenues rose 12%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for Knife River’s fourth-quarter earnings is pegged at 20 cents per share, which moved down from 29 cents in the past 60 days. The consensus estimate for net sales is pegged at $568.3 million.
Factors to Note
Knife River’s fourth-quarter earnings and revenues are expected to have aided by strong support from each region and double-digit price increases across all core product lines. Also, strong bidding strategies are anticipated to have elevated the contracting services backlog in the fourth quarter of 2023.
Knife River Corporation Price and EPS Surprise
Knife River Corporation price-eps-surprise | Knife River Corporation Quote
Knife River has effectively implemented its EDGE plan to enhance adjusted EBITDA margins and achieve strategic objectives. A crucial component of this strategy involves optimizing pricing to fully capture the value of core products, including aggregates, ready-mix concrete, asphalt, and contracting services. The company has adopted a more judicious approach in selecting higher-margin projects within its contracting services division. Pricing momentum, cost controls, and positive impacts from EDGE initiatives are likely to have added to the fourth-quarter results.
Also, inflation, higher liquid asphalt and diesel fuel costs, a rise in transportation and insurance costs, as well as labor costs, may have put pressure on the bottom line in the fourth quarter. Also, expenses related to higher repair and maintenance, supply and contract as well as supply-chain bottlenecks are added concerns.
For the Pacific segment, the consensus mark for revenues is currently pegged at $108 million, as rebounding market activity is driving all product lines. The segment has been benefiting from higher realized prices across its markets.
The same for Northwest unit is currently pegged at $121 million, aided by strong product pricing.
The consensus mark for the Mountain sector is currently pegged at $126 million, as strong commercial, residential and public agency activity within the contracting services business has been aiding it.
The consensus mark for North Central and All Other segments is currently pegged at $178 million and $35.6 million, respectively. Strong price increases across all product lines are likely to have aided the North Central results. Historically, strong market conditions in the Energy Services business, as well as improved materials market conditions in the South Region, are likely to have supported growth in All Other segment.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Knife River 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.
Currently, KNF has an Earnings ESP of 0.00% and a Zacks Rank #3. 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 other companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
Owens Corning (OC - Free Report) has an Earnings ESP of +1.95% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
OC’s earnings for the to-be-reported quarter are expected to increase 13.3%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 17.5%.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +8.24% and a Zacks Rank #3.
LPX’s earnings for the to-be-reported quarter are expected to decline 14.8%. 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%.
JELD-WEN Holding, Inc. (JELD - Free Report) has an Earnings ESP of +10.90% and has a Zacks Rank #3.
JELD’s earnings topped the consensus mark in each of the last four quarters, with the average being 126.5%. Earnings for the to-be-reported quarter are expected to decline 46.8% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.