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Vulcan Materials (VMC) Q2 Earnings: What's in the Cards?

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Vulcan Materials Company (VMC - Free Report) is set to release second-quarter 2017 financial numbers before the opening bell on Aug 2.

Last quarter, the company had delivered a positive earnings surprise of 16.87%. Notably, the company surpassed the Zacks Consensus Estimate in only one of the last four quarters, which more than offset the three earnings misses. This resulted in an average earnings beat of 4.24%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Sustained growth in private construction activity is expected to bode well for demand of both the aggregates and non-aggregates business lines. Further, prospects for higher funding levels and easy regulatory environment might prove beneficial for the company with respect to idled projects. Overall, key Vulcan states that make up 77% of its total revenue have significantly increased their highway funding. Again, Texas, Florida and Georgia have made major increases to their funding programs in recent years, raising their highway programs to record levels. This will help the company to boost its revenue in the to-be-reported quarter.

However, any slowdown in activity related to weather on some parts of the Southeast/Mid-Atlantic region might impact Vulcan's results.

The company’s aggressive cost-control initiatives, strong aggregate reserve position, and pricing power are likely to contribute in the second quarter.

For the second quarter, the Zacks Consensus Estimate for earnings is pegged at $1.24 per share, reflecting an increase of 37.5% year over year, while the consensus for revenues is $1.08 billion, implying a 12.8% year-over-year growth.

Earnings Whispers

Our proven model does not conclusively show that Vulcan is likely to beat on earnings this quarter. This is because 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. However, that is not the case here as you will see below. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks ESP: Vulcan’s Earnings ESP is 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.24. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Vulcan’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Releases in the Sector

D.R. Horton, Inc. (DHI - Free Report) came up with yet another stellar show in the third quarter of fiscal 2017. Both earnings and revenues beat the Zacks Consensus Estimate, courtesy of a solid housing market scenario.

NVR, Inc.’s (NVR - Free Report) second-quarter 2017 earnings surpassed the Zacks Consensus Estimate by 22.9%. Total revenue (Homebuilding & Mortgage Banking fees) was $1.54 billion in the quarter and increased 11% year over year, driven by higher housing revenues and mortgage-banking fees.

Upcoming Release in the Sector

Louisiana-Pacific Corp. (LPX - Free Report) is scheduled to release quarterly numbers on Aug 1. The Zacks Consensus Estimate for earnings is pegged at 61 cents, reflecting an increase of 116.7% on a year-over-year basis.

Vulcan Materials Company Price and EPS Surprise


Vulcan Materials Company Price and EPS Surprise | Vulcan Materials Company Quote

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