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Construction Stocks' Earnings Lineup for Nov 8: DHI, PRIM

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With the earnings season drawing to a close, 84.6% companies in the construction space have reported their Q3 results. According to our latest Earnings Preview, 36.4% have surpassed earnings estimates while 9.1% beat revenue expectations.

Total earnings for these construction companies increased 6.2% on 6.7% higher revenues.

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.

So far, some of the leading companies in the construction sector have reported their Q3 numbers. Masco Corporation (MAS - Free Report) reported 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 same. KB Home (KBH - Free Report) earnings surpassed analysts’ expectations by 7.7% and also increased 83% year over year in the third quarter.

Let us take a look at how these construction sector stocks are placed ahead of their upcoming earnings releases on Nov 8.

D.R. Horton Inc. (DHI - Free Report) , one of the largest homebuilders in the United States, builds high quality, single-family homes designed principally for the entry-level and move-up markets. (read: Can D.R. Horton Spring a Surprise in Q4 Earnings?)

Per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings.

D.R. Horton has a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

The company reported positive earnings surprise in two of the past four quarters, with an average beat of 3.47%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

D R HORTON INC Price and EPS Surprise


For the quarter, the Zacks Consensus Estimate for earnings is pegged at 77 cents, reflecting an increase of 20.4% year over year, while the consensus for revenues is at $3.67 billion, implying 15.6% year-over-year growth.

Headquartered in Dallas, TX, Primoris Services Corporation (PRIM - Free Report) operates as one of the largest specialty contractors and infrastructure companies in the United States.

Our proven model does not conclusively show a beat for Primoris Services as it has an unfavorable combination of an Earnings ESP of -8.00% (Most Accurate estimate at 23 and Zacks Consensus Estimate at 25 cents) and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the preceding quarter, the company posted a negative earnings surprise of 56.52%.The company has an average negative surprise of 24.55% for the trailing four quarters.

PRIMORIS SERVCS Price and EPS Surprise


For the third quarter, the Zacks Consensus Estimate for earnings is pegged at 25 cents, reflecting a decline of 33.11% year over year, while the consensus for revenues is at $557.5 million, indicating a 0.28% year-over-year increase.

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