Back to top

Image: Bigstock

What Awaits Matrix Service Company (MTRX) in Q1 Earnings?

Read MoreHide Full Article

Matrix Service Company (MTRX - Free Report) is set to release fiscal first-quarter 2020 results after the closing bell on Wednesday, Nov 6. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 26 cents per share on revenues of $397 million.

Let’s delve into the factors that might have influenced the company’s performance in the quarter ended September.

Factors to Consider

Strong operational performance at Matrix’s Storage Solutions division, which is responsible for more than 50% of the company’s operating income, is likely to have contributed to its fiscal first-quarter bottom line. In the previous three-month period, the company’s segment income surged to $8.7 million compared with just $802,000 in last year’s corresponding period. This trend most likely continued in the fiscal first quarter, primarily driven by higher tank and terminal construction volumes from recent project awards.

Additionally, the company’s Oil Gas & Chemical segment is expected to have benefited from strong project execution associated with maintenance works. Moreover, robust iron and steel work is likely to have contributed to the Industrial unit sales.

But on a bearish note, cost headwinds might have dampened the performance of this provider of engineering, fabrication, construction and repair and maintenance services. Matrix’s cost of sales in the fiscal fourth-quarter of 2019 came 30.7% above the year-ago quarter. The cost structure is likely to have deteriorated in the to-be-reported quarter as well due to higher-than-expected power project outlays in the Electrical Infrastructure segment.

What Does Our Model Say?

The proven Zacks model does not conclusively predict that Matrix is likely to beat estimates in the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Matrix has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 26 cents.

Zacks Rank: Matrix has a Zacks Rank of 2.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Highlights of Q4 Earnings & Surprise History

In the last reported quarter, the Tulsa, OK-based company beat the consensus mark on strong contribution from the Storage Solutions unit. Matrix reported earnings per share of 47 cents that surpassed the Zacks Consensus Estimate by 4 cents.

As far as earnings surprises are concerned, the service provider to a broad range of industries is on a solid footing, having gone past the Zacks Consensus Estimate in three of the last four reports, with the average positive surprise being 8.3%. This is depicted in the graph below:

Price and EPS Surprise

 

 Price and EPS Surprise

price-eps-surprise | Quote

Stocks to Consider

While earnings beat looks uncertain for Matrix, here are some firms from the energy space you may want to consider on the basis of our model, which shows that they have the right combination of elements to post earnings beat this season:

Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +7.42% and is Zacks #3 Ranked. The company is scheduled to release earnings on Nov 7.

Berry Petroleum Corporation (BRY - Free Report) has an Earnings ESP of +0.21% and a Zacks Rank #3. The company is scheduled to release earnings on Nov 7.

NuStar Energy L.P. (NS - Free Report) has an Earnings ESP of +47.01% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Nov 5.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>