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Building Product Stocks Earnings Due on Aug 2: VMC, RYN, SUM

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So far, the Q2 earnings season has seen quarterly releases from 61.5% of the construction companies in the S&P 500 cohort. According to the latest Earnings Trends, 75% of the companies have surpassed earnings and 62.5% have gone past revenue estimates. Total earnings of these construction companies increased 15.9% and total revenues rose 13.1%.

Overall, homebuilding companies, under the broader construction sector, seem to be on solid ground. The construction sector’s earnings are expected to increase 17.3% in Q2 compared with 9% in the earlier quarter. Revenues are also expected to improve 9.6% (6.8% growth in Q1).

Positives such as an improving economy, modest wage growth, low unemployment levels and positive consumer confidence raise optimism about the sector’s performance in 2017. As such, demand for companies’ products should also increase, thereby driving revenues.

So far, some of the leading companies in the housing industry have reported their Q2 results. PulteGroup Inc.’s (PHM - Free Report) second-quarter 2017 adjusted earnings of 47 cents per share beat the Zacks Consensus Estimate by 4.4%. Also, quarterly earnings reflected a solid 27% year over year jump. PulteGroup’s total revenues of $2.02 billion missed the Zacks Consensus Estimate by a meager 0.5%. Revenues, however, increased 12.3% year over year, owing to a rise in the number of homes delivered.

NVR, Inc. (NVR - Free Report) , one of the country’s largest homebuilding and mortgage-banking companies, reported second-quarter 2017 earnings of $35.19 per share, surpassing the Zacks Consensus Estimate by 22.9%. The reported figure also rose 60% from the year-ago profit level. Total revenues (Homebuilding & Mortgage Banking fees) increased 11% year over year.

Let us take a look at how the following construction companies are placed ahead of their quarterly release on Aug 2.

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

Last quarter, the company had delivered a positive earnings surprise of 16.87%. Notably, the company managed to surpass 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%.

Currently, the company has an Earnings ESP of 0.00%, as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.24.

Also, Vulcan carries a Zacks Rank #3 (Hold). Our proven model does not conclusively show an earnings beat for this company this quarter, as a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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 (read more: Vulcan Materials Q2 Earnings: What's in the Cards?).

Vulcan Materials Company Price and EPS Surprise

 

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

Rayonier Inc. (RYN - Free Report)     — a timberland real estate investment trust (REIT) — is slated to report second-quarter 2017 results, after market closes.

In the trailing four quarters, Rayonier beat estimates thrice and missed once, recording an average beat of 72.8%.

Currently, the Most Accurate estimate matches the Zacks Consensus Estimate of 11 cents, which translates into an Earnings ESP of 0.00%.

However, Rayonier’s Zacks Rank #4 (Sell) reduces the predictive power of ESP. We caution against stocks with Zacks Ranks #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions (read more: What to Expect from Rayonier this Earnings Season?).

Rayonier Inc. Price and EPS Surprise

 

Rayonier Inc. Price and EPS Surprise | Rayonier Inc. Quote

Summit Materials, Inc. (SUM - Free Report) , a construction material company, is slated to report second-quarter 2017 results, before the market opens.

In the preceding quarter, the company had delivered a negative earnings surprise of 4.17%. Overall, the company surpassed/met earnings in three of the last four quarters with an average miss of 2.06%.

Our proven model does not conclusively indicate an earnings beat for Summit as it has an Earnings ESP of -3.51% (Most Accurate estimate of 55 cents is lower than the Zacks Consensus Estimate of 57 cents) and a Zacks Rank #4. You can see the complete list of today’s Zacks #1 Rank stocks here.

For the second quarter, the Zacks Consensus Estimate for earnings is pegged at 57 cents per share, reflecting an increase of 24.5% year over year, while the consensus for revenues is $471.2 million, implying a 5.8% year-over-year growth.

Summit Materials, Inc. Price and EPS Surprise

 

Summit Materials, Inc. Price and EPS Surprise | Summit Materials, Inc. Quote

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