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Construction Stocks Earnings On Aug 1: AEGN, TREX, UCP, VMC

By Zacks Investment ResearchStock MarketsJul 28, 2016 09:46PM ET
www.investing.com/analysis/construction-stocks-earnings-on-aug-1:-aegn,-trex,-ucp,-vmc-200144984
Construction Stocks Earnings On Aug 1: AEGN, TREX, UCP, VMC
By Zacks Investment Research   |  Jul 28, 2016 09:46PM ET
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The second quarter of 2016 has been impressive for the U.S construction sector. Of the construction companies in the S&P 500, 53.8% have already reported their results. According to our earnings preview report, 57.1% of these companies have surpassed earnings estimates and 42.9% came ahead of revenue expectations. Total earnings of these construction companies increased 14.3% on 11.3% increase in revenues.

The recently released housing data has been fairly upbeat. Sales of new single-family houses rose 3.5% in June, reaching the highest level since Feb 2008 Housing starts clocked in 4.8% growth in Jun 2016. However, building permits, which indicate future construction trends, increased 1.5%, as builders added inventory cautiously due to lot shortages and regulatory problems. Nevertheless, strong job data for June is encouraging. In addition, the home remodeling market is also picking up pace.

On Jul 21, a couple of leading homebuilding companies reported their earnings. Atlanta-based homebuilder PulteGroup Inc. (NYSE:PHM) reported second-quarter results, beating estimates for both earnings and sales. However, another homebuilding company - D.R. Horton, Inc. (NYSE:DHI) – which reported on the same day did not fare as well. D.R. Horton exhibited a soft performance in the third quarter of fiscal 2016 with sales missing the Zacks Consensus Estimate and earnings coming in line with the same. However, the Texas-based homebuilder’s order trends were strong in the quarter.

On Jul 26, building products company, Masco Corporation (NYSE:MAS) reported second-quarter 2016 results. While its earnings beat estimates, revenues came in line with the same. Its second quarter performance was backed by significant year-over-year growth in earnings, revenues and margin, as the company capitalized on improving momentum in the repair and remodeling and new home construction industry.

Four leading construction companies are scheduled to report their quarterly results on Aug 1. Let us look at how these companies are placed ahead of their release.

Aegion Corp (NASDAQ:AEGN)

St. Louis, MO- based Aegion is a global leader in infrastructure protection and maintenance.

Aegion is set to report second-quarter 2016 results after market close.

Last quarter, Aegion posted a positive surprise of 50.00%. The company surpassed estimates in each of the past four quarters and has an average positive surprise of 15.14%.

AEGION CORP Price and EPS Surprise

AEGION CORP Price and EPS Surprise | AEGION CORP Quote

Aegion has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter is pegged at 25 cents.

Aegion is poised to benefit from stable conditions across its end markets. Rising order pattern and backlog for Infrastructure Solutions and Corrosion Protection's midstream market, as well as progress on cost-reduction initiatives will drive growth. However, soft oil prices are expected to remain a headwind. (Read: Aegion Q2 Earnings: Will It Disappoint Investors)

Vulcan Materials Company (NYSE:VMC)

Based in Birmingham, AL, Vulcan Materials is engaged in the production, distribution and sale of construction aggregates and other construction materials in the U.S. and Mexico. Vulcan is scheduled to report second-quarter 2016 results on Aug 1, before the opening bell.

Last quarter, Vulcan Materials posted a positive surprise of 333.33%. The company surpassed estimates in two out of the past four quarters, recording an average positive surprise of 89.17%.

VULCAN MATLS CO Price and EPS Surprise

VULCAN MATLS CO Price and EPS Surprise | VULCAN MATLS CO Quote

Vulcan Materials Company has an Earnings ESP of +1.01% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at 99 cents.

Construction activity and demand for aggregates continue to recover across all the markets in both private and public sector which coupled with strong pricing momentum, should support Vulcan’s top line in the second quarter and forward. (Read: Vulcan Materials Q2 Earnings: What's in the Cards? In our previous article it was uncertain if Vulcan will beat earnings this quarter. However, estimates changed thereafter and we are reasonably confident of an earnings beat.)

Trex Co. Inc. (NYSE:TREX)

Trex is set to report second-quarter 2016 results after the market close.

Last quarter, the company delivered a positive earnings surprise of 20.00%. The outdoor living products company posted two positive earnings surprises in the past four quarters with an average positive surprise of 4.45%.

TREX COMPANY Price and EPS Surprise

TREX COMPANY Price and EPS Surprise | TREX COMPANY Quote

The company has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at 72 cents.

UCP Inc
. (NYSE:UCP)

UCP, a California-based homebuilder and land developer, is set to report second-quarter 2016 results before the market opens.

The company posted positive earnings surprises thrice in the past four quarters with an average positive surprise of 714.81%.

UCP INC Price and EPS Surprise

UCP INC Price and EPS Surprise | UCP INC Quote

The company has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at 5 cents.

Conclusion

With the rise in demand for homes, new household formations and an improving job market in 2016, construction companies such as the ones discussed above are expected to witness strong demand for their products.

Stay Tuned! Check later on our full write-up on earnings releases of these stocks.



MASCO (MAS): Free Stock Analysis Report

TREX COMPANY (TREX): Free Stock Analysis Report

UCP INC (UCP): Free Stock Analysis Report

VULCAN MATLS CO (VMC): Free Stock Analysis Report

PULTE GROUP ONC (PHM): Free Stock Analysis Report

D R HORTON INC (DHI): Free Stock Analysis Report

AEGION CORP (AEGN): Free Stock Analysis Report

Original post
Construction Stocks Earnings On Aug 1: AEGN, TREX, UCP, VMC
 

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Construction Stocks Earnings On Aug 1: AEGN, TREX, UCP, VMC

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