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Construction Stock May 7 Q1 Earnings Lineup: IBP, FLR, GVA, ROAD

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·6-min read
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The Zacks Construction sector has performed pretty well so far this earnings season. Robust housing market dynamics and infrastructural projects (comprising communications, transmission, and power) contributed to the sector’s solid performance despite COVID-led market disruptions.

The companies’ top lines are expected to have got a boost by solid housing market fundamentals in the United States, given Fed’s dovish stance, low borrowing costs and the lack of available supply. Notably, builders have been witnessing higher demand as Americans are seeking more space for offices and classrooms.

Meanwhile, a number of project awards across multiple business segments — including communications, transmission and power — along with infrastructural projects in domestic as well as international markets also contributed significantly to the companies’ performance. Again, increasing defense spending in major economies like the United States, rising public investments in water infrastructure and utility plants as well as encouraging prospects in the healthcare market are expected to have acted as tailwinds.

However, severe cold weather, rise in lumber prices and a lack of supply took a toll on sales pace, pushed average home prices higher on a nationwide basis and resulted in weak U.S. housing data for February. These headwinds might have put pressure on the company’s margins and bottom-line performance.

Per the latest Earnings Outlook, construction sector earnings are expected to grow 55.7% year over year for the first quarter, indicating an increase from 31.5% growth in fourth-quarter 2020. Revenues are projected to increase 10.3% year over year, suggesting a decline from 11.7% growth in the fourth quarter.

Some notable construction companies like Louisiana-Pacific Corporation LPX, Martin Marietta Materials, Inc. MLM and Vulcan Materials Company VMC recently reported impressive first-quarter 2021 numbers. Another handful of companies from the same space are likely to release their respective quarterly numbers this week.

A Handful of Construction Stocks to Watch

Let’s take a quick glance at how the following construction stocks are poised ahead of their first-quarter earnings releases on May 7.

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

Installed Building Products, Inc. IBP is slated to report quarterly results before the opening bell. Fourth-quarter 2020 earnings surpassed the Zacks Consensus Estimate by 4.2% but revenues missed the same by 0.2%. Its earnings surpassed the consensus estimate in the trailing seven quarters, as shown in the chart below:

Installed Building Products, Inc. Price and EPS Surprise

Installed Building Products, Inc. Price and EPS Surprise
Installed Building Products, Inc. Price and EPS Surprise

Installed Building Products, Inc. price-eps-surprise | Installed Building Products, Inc. Quote

Our proven model, though, does not conclusively predict an earnings beat for the company as it has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

For the quarter to be reported, the Zacks Consensus Estimate for earnings has decreased 0.9% to $1.03 per share over the past 60 days. The figure, however, indicates a 32.1% increase from the year-ago earnings of 78 cents per share. The consensus mark for revenues is $449.53 million, suggesting an increase of 13.1% year over year.

Fluor Corporation FLR is slated to report quarterly results before the opening bell. In the last reported quarter, the company’s earnings and revenues lagged the Zacks Consensus Estimate by 7845.5% and 0.7%, respectively.

Fluor Corporation Price and EPS Surprise

Fluor Corporation Price and EPS Surprise
Fluor Corporation Price and EPS Surprise

Fluor Corporation price-eps-surprise | Fluor Corporation Quote

The chances of Fluor delivering an earnings beat are high this time around as it has an Earnings ESP of +107.69% and a Zacks Rank #3.

For the quarter to be reported, the Zacks Consensus Estimate for earnings has declined 63.6% to 4 cents per share in the past 30 days. The estimated figure, however, implies an 88.6% year-over-year decline. The consensus estimate for revenues is $3.15 billion, pointing to 23.5% year-over-year fall.

Construction Partners, Inc. ROAD is slated to report quarterly results before the opening bell. Fourth-quarter 2020 earnings topped the Zacks Consensus Estimate by 50% but revenues missed the same by 5.9%. Its earnings topped the consensus estimate in two of the last four quarters, with the average surprise being 9.6%, as shown in the chart below:

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

However, our proven model does not conclusively predict an earnings beat for the company as it has an Earnings ESP of -80.39% and a Zacks Rank #2.

For the quarter to be reported, the Zacks Consensus Estimate for earnings has been unchanged over the past 60 days at 10 cents per share. The estimated figure indicates a 233.3% increase from the year-ago earnings. The Zacks Consensus Estimate for revenues is pegged at $207.99 million, suggesting 23.3% year-over-year growth.

Granite Construction Incorporated GVA is slated to report quarterly results before the opening bell. For the quarter to be reported, the Zacks Consensus Estimate for loss is pegged at 64 cents per share. This indicates a 55.6% improvement from the year-ago loss of $1.44 per share.

Granite Construction Incorporated Price and EPS Surprise

Granite Construction Incorporated Price and EPS Surprise
Granite Construction Incorporated Price and EPS Surprise

Granite Construction Incorporated price-eps-surprise | Granite Construction Incorporated Quote

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Vulcan Materials Company (VMC) : Free Stock Analysis Report

LouisianaPacific Corporation (LPX) : Free Stock Analysis Report

Fluor Corporation (FLR) : Free Stock Analysis Report

Martin Marietta Materials, Inc. (MLM) : Free Stock Analysis Report

Granite Construction Incorporated (GVA) : Free Stock Analysis Report

Installed Building Products, Inc. (IBP) : Free Stock Analysis Report

Construction Partners, Inc. (ROAD) : Free Stock Analysis Report

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Zacks Investment Research

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