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What's in the Cards for NCI Building (NCS) in Q1 Earnings?

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NCI Building Systems, Inc. is scheduled to report first-quarter fiscal 2017 results, after the market closes on Mar 7. In the last quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate. NCI Building has beaten estimates in two out of the trailing four quarters, with an impressive average positive earnings surprise of 87.26%. Let’s see how things are shaping up for this announcement.

Key Factors

For fiscal first quarter, NCI Building expects revenues in the range of $370–$390 million and gross margins in the range of 21.0–23.5%. For fiscal 2017, NCI Building estimates revenues to be in the range of $1.75–$1.85 billion and adjusted EBITDA to be in the $175–205 million band.

Moreover, the company is likely to gain from growth in low-rise non-residential construction, restructuring and reorganization. NCI Building’s performance will also be aided by successful acquisitions, share repurchases and robust backlog growth. However, escalating steel costs, poor oil prices and unfavorable foreign currency remain headwinds for the company.

Share Price Performance

In the last one year, NCI Building has outperformed the Zacks classified Building & Construction Production Miscellaneous sub industry with respect to price performance. While the stock gained 36.3%, the industry recorded growth of 33.5%, over the same time frame.


 

Earnings Whispers

Our proven model does not conclusively show that NCI Building is likely to beat earnings this quarter as it lacks the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: The Earnings ESP for NCI Building is 0.00%. This is because the Most Accurate estimate of 5 cents is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NCI Building currently carries a Zacks Rank #3. Although this increases the predictive power of ESP, the company’s 0.00% ESP makes an earnings prediction uncertain.

It should be noted 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.

Stocks to Consider

Evercore Partners Inc. (EVR - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headwaters Incorporated has an Earnings ESP of +23.53% and a Zacks Rank #3.

Quanta Services, Inc. (PWR - Free Report) has an Earnings ESP of +9.76% and a Zacks Rank #3.

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