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PGT Innovations (PGTI) Q3 Earnings: What's in the Cards?
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PGT Innovations, Inc. is all set to report third-quarter 2018 results on Nov 1, before the opening bell.
The company, which shares space in the Building Products - Miscellaneous industry with United Rentals, Inc. (URI - Free Report) and Armstrong World Industries, Inc. (AWI - Free Report) , delivered better-than-expected results in three of the last four quarters, with the average positive earnings surprise being 17.9%. Notably, in the last reported quarter, its earnings and revenues surpassed the Zacks Consensus Estimate by 32.3% and 5%, respectively.
Shares of PGT Innovations have outperformed its industry in a past year. The company’s shares have gained 46% against the industry’s fall of 22.3% in the said period. However, earnings estimates for the to-be-reported quarter as well as current year have moved south over the past 30 days, depicting concerns surrounding the company’s earnings performance.
Let’s See How Things are Shaping Up for This Announcement
PGT Innovations’ third-quarter results are expected to benefit from higher sales, given strong demand from new construction, and repair and remodeling activities owing to CGI operations, along with improved margins.
The company has been successfully executing its strategy of investing in advertising and marketing to drive strong sales. It expects to further enhance its value, going forward. This is evident from the company’s first half of 2018 results, with net sales increasing 24% courtesy of higher demand for its products, given deep customer relationships and increased awareness of the benefits of impact-resistant products, following last year’s hurricane season. Moreover, the company recorded backlog of $98.9 million as of Jun 30, 2018, backed by increased demand.
It is expected to reap the benefits from strong demand in both new construction, and repair and remodeling channels. In fact, sales from repair and remodeling activities, representing 64% of sales, increased 31% in the first half of 2018. The trend is expected to continue in the coming period as well.
The company’s gross margin also benefited from higher volume, improved operating effectiveness and a favorable mix of sales, offsetting the inflationary headwinds, including higher aluminum prices along with increases in labor and fuel costs. During the first half of 2018, adjusted gross margin of 34% expanded 330 basis points (bps) from the year-ago comparable period.
Meanwhile, in August, PGT Innovations acquired Western Window Systems, positioning the company as a national leader in the premium window and door space while diversifying its geographic footprint, customer base, and higher-margin profile. This is expected to be accretive to GAAP EPS in the first half of 2019. However, the company expects more acquisition-related cost adjustment in third-quarter results.
Again, it faces higher personnel-related costs, along with greater sales and fuel costs. During the first six months of 2018, selling, general and administrative expenses grew 29.1% year over year, including approximately $1 million related to acquisitions. Also, as a percentage of sales, SG&A cost increased 80 bps. Inflationary headwinds, especially higher costs for aluminum, pose a concern.
Earnings & Revenue Expectation
The Zacks Consensus Estimate calls for PGT Innovations’ third-quarter revenues to increase 29.2% to $163.89 million. Meanwhile, the consensus estimate for earnings is pegged at 26 cents, implying growth of 62.5% on a year-over-year basis.
Our proven model does not conclusively show that PGT Innovations is likely to beat estimates in the to-be-reported 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -4.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PGT Innovations currently carries a Zacks Rank #2.
Meanwhile, we caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions. You can see the complete list of today’s Zacks #1 Rank stocks here.
A Stock With Favorable Combination
Here is a construction stock that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat in the upcoming release:
MasTec, Inc. (MTZ - Free Report) has an Earnings ESP of +2.2% and a Zacks Rank #2. The company is slated to report quarterly results on Nov 1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
PGT Innovations (PGTI) Q3 Earnings: What's in the Cards?
PGT Innovations, Inc. is all set to report third-quarter 2018 results on Nov 1, before the opening bell.
The company, which shares space in the Building Products - Miscellaneous industry with United Rentals, Inc. (URI - Free Report) and Armstrong World Industries, Inc. (AWI - Free Report) , delivered better-than-expected results in three of the last four quarters, with the average positive earnings surprise being 17.9%. Notably, in the last reported quarter, its earnings and revenues surpassed the Zacks Consensus Estimate by 32.3% and 5%, respectively.
Shares of PGT Innovations have outperformed its industry in a past year. The company’s shares have gained 46% against the industry’s fall of 22.3% in the said period. However, earnings estimates for the to-be-reported quarter as well as current year have moved south over the past 30 days, depicting concerns surrounding the company’s earnings performance.
Let’s See How Things are Shaping Up for This Announcement
PGT Innovations’ third-quarter results are expected to benefit from higher sales, given strong demand from new construction, and repair and remodeling activities owing to CGI operations, along with improved margins.
The company has been successfully executing its strategy of investing in advertising and marketing to drive strong sales. It expects to further enhance its value, going forward. This is evident from the company’s first half of 2018 results, with net sales increasing 24% courtesy of higher demand for its products, given deep customer relationships and increased awareness of the benefits of impact-resistant products, following last year’s hurricane season. Moreover, the company recorded backlog of $98.9 million as of Jun 30, 2018, backed by increased demand.
It is expected to reap the benefits from strong demand in both new construction, and repair and remodeling channels. In fact, sales from repair and remodeling activities, representing 64% of sales, increased 31% in the first half of 2018. The trend is expected to continue in the coming period as well.
The company’s gross margin also benefited from higher volume, improved operating effectiveness and a favorable mix of sales, offsetting the inflationary headwinds, including higher aluminum prices along with increases in labor and fuel costs. During the first half of 2018, adjusted gross margin of 34% expanded 330 basis points (bps) from the year-ago comparable period.
Meanwhile, in August, PGT Innovations acquired Western Window Systems, positioning the company as a national leader in the premium window and door space while diversifying its geographic footprint, customer base, and higher-margin profile. This is expected to be accretive to GAAP EPS in the first half of 2019. However, the company expects more acquisition-related cost adjustment in third-quarter results.
Again, it faces higher personnel-related costs, along with greater sales and fuel costs. During the first six months of 2018, selling, general and administrative expenses grew 29.1% year over year, including approximately $1 million related to acquisitions. Also, as a percentage of sales, SG&A cost increased 80 bps. Inflationary headwinds, especially higher costs for aluminum, pose a concern.
Earnings & Revenue Expectation
The Zacks Consensus Estimate calls for PGT Innovations’ third-quarter revenues to increase 29.2% to $163.89 million. Meanwhile, the consensus estimate for earnings is pegged at 26 cents, implying growth of 62.5% on a year-over-year basis.
PGT Innovations, Inc. Price and EPS Surprise
PGT Innovations, Inc. Price and EPS Surprise | PGT Innovations, Inc. Quote
What Does the Zacks Model Say?
Our proven model does not conclusively show that PGT Innovations is likely to beat estimates in the to-be-reported 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.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -4.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PGT Innovations currently carries a Zacks Rank #2.
Meanwhile, we caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
You can see the complete list of today’s Zacks #1 Rank stocks here.
A Stock With Favorable Combination
Here is a construction stock that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat in the upcoming release:
MasTec, Inc. (MTZ - Free Report) has an Earnings ESP of +2.2% and a Zacks Rank #2. The company is slated to report quarterly results on Nov 1.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>