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Construction Partners (ROAD) to Report Q1 Earnings: What's Up?

Construction Partners, Inc. ROAD is scheduled to report first-quarter fiscal 2023 results on Feb 9, after the closing bell.

In the last-reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 8.7% and 8.3%, respectively. Both metrics increased 66.7% and 40.9% year over year, respectively. The upside was mainly backed by solid organic growth and acquisition benefits.

This vertically-integrated civil infrastructure company surpassed earnings estimates in two of the trailing four quarters, meeting once and lagging on the other two occasions, with the average negative surprise being 58.1%.

Earnings & Revenue Expectations

The Zacks Consensus Estimate for Construction Partners’ fiscal first-quarter earnings has decreased to 6 cents from 8 cents per share in the past 30 days. The estimated figure indicates a 45.5% decrease on a year-over-year basis. The consensus estimate for revenues is pegged at $317.5 million, indicating a year-over-year rise of 11.4%.

Construction Partners, Inc. Price and EPS Surprise

Construction Partners, Inc. Price and EPS Surprise
Construction Partners, Inc. Price and EPS Surprise

Construction Partners, Inc. price-eps-surprise | Construction Partners, Inc. Quote

Factors to Note

Construction Partners’ revenues are expected to have increased in the fiscal first quarter, given healthy funding programs at the state and federal levels, as well as a solid commercial market throughout the geographic footprint served. Solid demand for infrastructure services throughout end markets in private and public sectors, consistent execution of its business model and a growth strategy are likely to have contributed to the quarterly revenues.

Also, organic and inorganic growth opportunities in the attractive Southeastern U.S. road construction/repair market are expected to have helped the company generate higher revenues in the to-be-reported quarter. Backed by solid wins and shorter-duration projects generating higher turnover in backlogs, ROAD is expected to generate higher revenues for the fiscal first quarter.

However, the company has been facing challenges related to supply-chain disruptions, inflation, tight labor and higher fuel costs. These are likely to have put pressure on the to-be-reported quarter’s bottom line.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Construction Partners this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ROAD has an Earnings ESP of -36.36% and currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stock With Favorable Combination

Here is one company in the Zacks Construction sector, which according to our model, has the right combination of elements to beat on earnings in their respective quarters to be reported.

Fluor Corporation FLR has an Earnings ESP of +2.48% and carries a Zacks Rank #2.

FLR’s earnings topped the consensus mark in one of the last four quarters but missed on three occasions, with the average negative surprise being 38.2%.

Some Recent Construction Releases

AECOM ACM reported better-than-expected results for first-quarter fiscal 2023, where earnings and revenues surpassed the Zacks Consensus Estimate. Post the results, shares of the technical and management support services provider slipped 0.01% on Feb 6.

On a year-over-year basis, ACM’s bottom line declined despite top-line growth. The company’s strong top-line performance was backed by strong organic NSR growth.

Otis Worldwide Corporation OTIS reported solid fourth-quarter 2022 results. Its earnings and sales surpassed the Zacks Consensus Estimate. Its quarterly results reflected strong performance, including mid-single-digit organic sales growth in New Equipment and Service and continued operating profit margin expansion in the Service business.

Otis remains focused on strong portfolio growth and generating a solid New Equipment backlog. It also intends to expand operating margins, return cash to shareholders through a capital-allocation strategy and pursue additional progress toward ESG goals.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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