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Construction Stocks' Earnings Roster for Nov 1: MLM, HW, MDC

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After a string of third-quarter earnings releases by homebuilding companies, we are gearing up for the next batch of reports this week. Overall, earnings growth for the quarter is on track to mark positive growth for the S&P 500 index following five consecutive quarters of declines.

Of the companies in the construction space, 53.8% have reported their Q3 results. According to the recent Earnings Preview report, 42.9% have surpassed earnings estimates while 14.3% beat revenue expectations.

So far, total earnings for construction companies have increased 5.5% on 7.3% higher revenues. The sector is likely to register a 6.1% increase in earnings on 7% revenue growth.

Positives like a healthier economy, improving employment levels, low interest rates, positive consumer confidence and a tight supply situation raise optimism about the sector’s second-half performance. Further, a strong home remodeling market along with solid job data and rising consumer confidence are doing the trick for these stocks.

Some of the leading companies in the construction space have already reported their third-quarter numbers. Masco Corporation (MAS - Free Report) released third-quarter results wherein both earnings and revenues missed the Zacks Consensus Estimate. PulteGroup Inc.’s (PHM - Free Report) third-quarter 2016 earnings were in line with the Zacks Consensus Estimate while revenues missed the mark. KB Home (KBH - Free Report) reported third-quarter numbers wherein earnings surpassed analysts’ expectations by 7.7% and also increased 83% year over year.

Let us take a look at how these construction stocks are placed ahead of their quarterly releases on Nov 1.

Martin Marietta Materials, Inc. (MLM - Free Report) is set to report third-quarter fiscal 2016 results, before market opens. Based in Raleigh, NC, the company produces and supplies construction aggregates and other heavy building materials, mainly cement, in the U.S.

The company has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell). Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Last quarter, the company posted a negative earnings surprise of 6.86%. Meanwhile, it missed estimates in three out of the past four quarters but managed to record an average positive surprise of 24.11%, courtesy of the stellar performance in the March quarter (read more: Martin Marietta Q3 Earnings: What's in the Cards?).

MARTIN MRT-MATL Price and EPS Surprise

 

MARTIN MRT-MATL Price and EPS Surprise | MARTIN MRT-MATL Quote

Headwaters Incorporated provides products, technologies and services to the construction materials and building products markets. The company will report fourth quarter and fiscal 2016 results, before the market opens.

Our proven model does not conclusively predict an earnings beat for Headwaters this quarter as it has an earnings ESP of 0.00% and a Zacks Rank #3 (Hold). That is because, as per our model, a stock needs to have both a positive earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat earnings.

In the previous quarter, the company posted a negative earnings surprise of 23.08%. Headwaters reported positive earnings surprises in three of the past four quarters, with an average beat of 16.29%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 41 cents a share, reflecting a decline of 18.8% year over year, while the consensus for revenues is at $289.2 million, implying 6.1% year-over-year growth.

HEADWATERS INC Price and EPS Surprise

 

HEADWATERS INC Price and EPS Surprise | HEADWATERS INC Quote

MDC Holdings Inc. is slated to report its third-quarter numbers before the market opens.

The combination of an earnings ESP of -1.59% and a Zacks Rank #3 dims possibilities of an earnings beat for the company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the previous quarter, the company posted a positive earnings surprise of 12.24%. MDC reported negative earnings surprises in three of the past four quarters, the average being 11.01%.

For the third quarter, the Zacks Consensus Estimate for earnings is pegged at 63 cents a share, reflecting a rise of 75% year over year, while the consensus for revenues is at $628.3 million, implying 34.1% year-over-year growth.

MDC HLDGS Price and EPS Surprise

 

MDC HLDGS Price and EPS Surprise | MDC HLDGS Quote

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