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Cornerstone (CNR) to Post Q1 Earnings: What's in Store?
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Cornerstone Building Brands, Inc. is scheduled to release first-quarter 2020 results on May 12, after the closing bell.
In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 320%. On a year-over-year basis, adjusted earnings declined 80% to 11 cents per share. On a GAAP basis, net sales increased 116.9% from the prior-year quarter to $1,244.4 million. Net sales declined 1.8% from the fourth quarter of 2018 on a pro-forma basis.
This leading provider of exterior building products reported better-than-expected earnings in two of the last four quarters, with the average positive surprise being 52%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has remained unchanged at a loss of 22 cents over the past 30 days. In the year-ago period, it recorded a loss of 28 cents per share.
Softened market demand in the Commercial segment (accounting for 38.4% of net sales) is expected to have impacted the company’s first-quarter revenues. Pricing headwind from lower steel costs added to the woes. Nonetheless, healthy single-family starts and repair and remodeling (R&R) activities throughout most of the first quarter are expected to have offset the aforementioned negatives. Also, the acquisition of Kleary Masonry, Inc. is expected to have aided its top-line growth and expanded value-added, turnkey stone veneer solutions.
Meanwhile, the U.S. Department of Homeland Security has designated the industry as 'life sustaining and essential' amid COVID-19-induced uncertainties. Hence, it continues operations as 'essential' business and delivers quality products to customers.
Overall, as mentioned in fourth-quarter earnings call, the company had expected favorable housing starts and R&R activity to have a positive impact on both Windows and Siding segments revenues in the first quarter. It expects both the segments to generate mid-single digit year-over-year growth on a pro-forma basis. Also, it expects increasing backlog to have aided the Commercial segment. For the Commercial segment, it expects net sales growth to remain flat year over year on a pro-forma basis.
From the margin perspective, the company expects stable material costs and a low cost structure owing to cost-saving efforts to have aided adjusted EBITDA in the first quarter. That said, wage adjustments and variable employee compensation and benefits may have been potent headwinds. It expects first-quarter adjusted EBITDA between $75 million and $90 million.
Higher amortization expense associated with intangibles from the Ply Gem merger and Environmental Stoneworks acquisition, strategic development and acquisition-related costs, as well as restructuring and impairment charges are also expected to have been headwinds.
Quantitative Model Prediction
Our proven model does not conclusively predict an earnings beat for Cornerstone 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 as you will see below.
Earnings ESP: Its Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Installed Building Products, Inc. (IBP - Free Report) reported better-than-expected results in first-quarter 2020. Both the top and bottom lines not only surpassed the Zacks Consensus Estimate but also grew impressively from the prior-year quarter, backed by strong end-market demand.
Owens Corning (OC - Free Report) reported impressive earnings in first-quarter 2020. The bottom line surpassed the Zacks Consensus Estimate and improved on a year-over-year basis.
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
Cornerstone (CNR) to Post Q1 Earnings: What's in Store?
Cornerstone Building Brands, Inc. is scheduled to release first-quarter 2020 results on May 12, after the closing bell.
In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 320%. On a year-over-year basis, adjusted earnings declined 80% to 11 cents per share. On a GAAP basis, net sales increased 116.9% from the prior-year quarter to $1,244.4 million. Net sales declined 1.8% from the fourth quarter of 2018 on a pro-forma basis.
This leading provider of exterior building products reported better-than-expected earnings in two of the last four quarters, with the average positive surprise being 52%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has remained unchanged at a loss of 22 cents over the past 30 days. In the year-ago period, it recorded a loss of 28 cents per share.
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Factors to Note
Softened market demand in the Commercial segment (accounting for 38.4% of net sales) is expected to have impacted the company’s first-quarter revenues. Pricing headwind from lower steel costs added to the woes. Nonetheless, healthy single-family starts and repair and remodeling (R&R) activities throughout most of the first quarter are expected to have offset the aforementioned negatives. Also, the acquisition of Kleary Masonry, Inc. is expected to have aided its top-line growth and expanded value-added, turnkey stone veneer solutions.
Meanwhile, the U.S. Department of Homeland Security has designated the industry as 'life sustaining and essential' amid COVID-19-induced uncertainties. Hence, it continues operations as 'essential' business and delivers quality products to customers.
Overall, as mentioned in fourth-quarter earnings call, the company had expected favorable housing starts and R&R activity to have a positive impact on both Windows and Siding segments revenues in the first quarter. It expects both the segments to generate mid-single digit year-over-year growth on a pro-forma basis. Also, it expects increasing backlog to have aided the Commercial segment. For the Commercial segment, it expects net sales growth to remain flat year over year on a pro-forma basis.
From the margin perspective, the company expects stable material costs and a low cost structure owing to cost-saving efforts to have aided adjusted EBITDA in the first quarter. That said, wage adjustments and variable employee compensation and benefits may have been potent headwinds. It expects first-quarter adjusted EBITDA between $75 million and $90 million.
Higher amortization expense associated with intangibles from the Ply Gem merger and Environmental Stoneworks acquisition, strategic development and acquisition-related costs, as well as restructuring and impairment charges are also expected to have been headwinds.
Quantitative Model Prediction
Our proven model does not conclusively predict an earnings beat for Cornerstone 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 as you will see below.
Earnings ESP: Its Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cornerstone, which shares space with Forterra, Inc. in the Zacks Building Products - Concrete and Aggregates industry, currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
Installed Building Products, Inc. (IBP - Free Report) reported better-than-expected results in first-quarter 2020. Both the top and bottom lines not only surpassed the Zacks Consensus Estimate but also grew impressively from the prior-year quarter, backed by strong end-market demand.
Owens Corning (OC - Free Report) reported impressive earnings in first-quarter 2020. The bottom line surpassed the Zacks Consensus Estimate and improved on a year-over-year basis.
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 >>