We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
New Products to Benefit UFP Industries' (UFPI) Q1 Earnings
Read MoreHide Full Article
UFP Industries, Inc. (UFPI - Free Report) — formerly known as Universal Forest Products — is scheduled to release first-quarter 2020 results on Apr 22, after the closing bell.
In the last reported quarter, the company’s earnings of 61 cents per share topped the Zacks Consensus Estimate by 3.4% but revenues of $998 million missed the same by 0.1%. On a year-over-year basis, earnings improved 19.6% and revenues grew 1%.
UFP Industries reported better-than-expected earnings in all the last four quarters, with the average surprise being 7.7%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been downwardly revised by 3% over the past 30 days to 65 cents. Nonetheless, this indicates an increase of 12.1% from the year-ago quarter. The consensus mark for revenues is $1.05 billion, suggesting 3.4% year-over-year growth.
Universal Forest Products, Inc. Price and EPS Surprise
Industry fundamentals mostly remained solid throughout first-quarter 2020. UFP Industries is expected to have benefited from the existing product portfolio, initiatives to improve production efficiency and solid growth opportunities in the industrial market. Also, efforts to introduce new products are likely to have been a boon for the company. Overall, organizational restructuring, a new branding campaign, new and value-added sales mix, as well as operating leverage are expected to have benefited its first-quarter performance.
Notably, new and value-added sales mix has been an important driver for growth and margin improvement. Deckorators branded product revenues, new product sales and an increase in demand in several existing product lines with a big-box customer have been driving the retail market’s unit sales.
In the industrial market, acquisitions have been the primary contributor to unit sales growth. However, weaker demand is expected to have weighed on the segment’s revenues. Nonetheless, unit sales to the construction market have been benefiting from higher contribution from commercial and residential construction customers.
However, widespread slowdown in economic activity owing to coronavirus outbreak began to adversely affect business operations in the latter part of March, with continuation of the same in April.
That said, UFP Industries — which serves a wide range of customers including essential businesses such as health care manufacturers, food suppliers, building products dealers and infrastructure contractors — has seen little disruption from the pandemic so far except in some states that deemed construction non-essential. Notably, the majority of UFP Industries’ employees are deemed “Essential Critical Infrastructure Workers” under the guidance set forth by the Department of Homeland Security, as executed by the Cybersecurity and Infrastructure Security Agency. Hence, most of the businesses have not witnessed a significant impact from the pandemic.
However, lower lumber pricing in the Industrial business, reduced selling prices and high labor costs might have been pressing concerns. Declining lumber prices of various variations including southern yellow pine and spruce/pine/fir, as well as sheet/dimensional products like plywood and oriented strand board are expected to have hurt the company’s first-quarter sales.
Overall, although rising labor costs, significant fluctuations in the lumber market and coronavirus-induced slowdown (mostly in the latter part of March) are expected to negatively impact first-quarter results, the company is likely to have generated strong earnings on the back of solid new and value-added products growth.
Quantitative Model Prediction
Our proven model does not conclusively predict an earnings beat for UFP Industries this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. 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.
Here are a few construction stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
Eagle Materials Inc. (EXP - Free Report) has an Earnings ESP of +4.60% and a Zacks Rank #3.
Masco Corporation (MAS - Free Report) has an Earnings ESP of +0.58% and carries a Zacks Rank #3.
Frontdoor, Inc. (FTDR - Free Report) has an Earnings ESP of +9.76% and carries a Zacks Rank #3.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
New Products to Benefit UFP Industries' (UFPI) Q1 Earnings
UFP Industries, Inc. (UFPI - Free Report) — formerly known as Universal Forest Products — is scheduled to release first-quarter 2020 results on Apr 22, after the closing bell.
In the last reported quarter, the company’s earnings of 61 cents per share topped the Zacks Consensus Estimate by 3.4% but revenues of $998 million missed the same by 0.1%. On a year-over-year basis, earnings improved 19.6% and revenues grew 1%.
UFP Industries reported better-than-expected earnings in all the last four quarters, with the average surprise being 7.7%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been downwardly revised by 3% over the past 30 days to 65 cents. Nonetheless, this indicates an increase of 12.1% from the year-ago quarter. The consensus mark for revenues is $1.05 billion, suggesting 3.4% year-over-year growth.
Universal Forest Products, Inc. Price and EPS Surprise
Universal Forest Products, Inc. price-eps-surprise | Universal Forest Products, Inc. Quote
Factors to Note
Industry fundamentals mostly remained solid throughout first-quarter 2020. UFP Industries is expected to have benefited from the existing product portfolio, initiatives to improve production efficiency and solid growth opportunities in the industrial market. Also, efforts to introduce new products are likely to have been a boon for the company. Overall, organizational restructuring, a new branding campaign, new and value-added sales mix, as well as operating leverage are expected to have benefited its first-quarter performance.
Notably, new and value-added sales mix has been an important driver for growth and margin improvement. Deckorators branded product revenues, new product sales and an increase in demand in several existing product lines with a big-box customer have been driving the retail market’s unit sales.
In the industrial market, acquisitions have been the primary contributor to unit sales growth. However, weaker demand is expected to have weighed on the segment’s revenues. Nonetheless, unit sales to the construction market have been benefiting from higher contribution from commercial and residential construction customers.
However, widespread slowdown in economic activity owing to coronavirus outbreak began to adversely affect business operations in the latter part of March, with continuation of the same in April.
That said, UFP Industries — which serves a wide range of customers including essential businesses such as health care manufacturers, food suppliers, building products dealers and infrastructure contractors — has seen little disruption from the pandemic so far except in some states that deemed construction non-essential. Notably, the majority of UFP Industries’ employees are deemed “Essential Critical Infrastructure Workers” under the guidance set forth by the Department of Homeland Security, as executed by the Cybersecurity and Infrastructure Security Agency. Hence, most of the businesses have not witnessed a significant impact from the pandemic.
However, lower lumber pricing in the Industrial business, reduced selling prices and high labor costs might have been pressing concerns. Declining lumber prices of various variations including southern yellow pine and spruce/pine/fir, as well as sheet/dimensional products like plywood and oriented strand board are expected to have hurt the company’s first-quarter sales.
Overall, although rising labor costs, significant fluctuations in the lumber market and coronavirus-induced slowdown (mostly in the latter part of March) are expected to negatively impact first-quarter results, the company is likely to have generated strong earnings on the back of solid new and value-added products growth.
Quantitative Model Prediction
Our proven model does not conclusively predict an earnings beat for UFP Industries this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. 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.
Currently, it has a Zacks Rank #2 and an Earnings ESP of -9.23%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are a few construction stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:
Eagle Materials Inc. (EXP - Free Report) has an Earnings ESP of +4.60% and a Zacks Rank #3.
Masco Corporation (MAS - Free Report) has an Earnings ESP of +0.58% and carries a Zacks Rank #3.
Frontdoor, Inc. (FTDR - Free Report) has an Earnings ESP of +9.76% and carries a Zacks Rank #3.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>