Construction Stocks Earnings On Jul 28: CAA, EME, MTH

The second quarter earnings season is in full swing. Of the construction companies in the S&P 500, 46.2% have already reported their results. According to our earnings preview report, 50% of these companies surpassed earnings and revenue expectations. Total earnings of these construction companies increased 14% on 12.5% increase in revenues.

The remaining S&P 500 construction companies are expected to post a 10.8% year-over-year increase in earnings in Q2. The revenue projections are fairly optimistic with sales likely to increase 5.1% year over year.

The recently released housing data is fairly upbeat. Sales of new single-family houses in Jun 2016 increased 3.5% from May 2016 and 25.4% year over year. Housing starts clocked in 4.8% growth in Jun 2016. However, building permits, which indicate future construction trends, increased only 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.

Last week, a couple of leading homebuilding companies reported their earnings. Atlanta-based homebuilder PulteGroup Inc. (NYSE:PHM) reported second-quarter results on Jul 21, 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 28, three leading construction companies are scheduled to report their quarterly results. Let us look at how these companies are placed ahead of their release.

CalAtlantic Group, Inc. ( (NYSE:CAA) )

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

Last quarter, CalAtlantic posted a negative surprise of 1.89%. Though CalAtlantic surpassed estimates once in the past four quarters, it has an average positive surprise of 8.14%.

CalAtlantic has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter is pegged at 75 cents.

Emcor Group Inc (NYSE:EME)

EMCOR Group is a provider of mechanical and electrical construction services, industrial and energy infrastructure and building services. The company is set to report second-quarter 2016 results.

Last quarter, Emcor posted a negative surprise of 1.72%. Emcor has surpassed estimates in two out of the past four quarters with an average positive surprise of 1.40%.

Emcor has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at 71 cents.

Meritage Homes Corp (NYSE:MTH)

Meritage Homes is set to report second-quarter 2016 results, before market opens.

Last quarter, Meritage Homes posted a positive surprise of 11.11%. Meritage Homes has surpassed estimates in three out of the past four quarters and has an average positive surprise of 4.16%.

Meritage Homes has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for the quarter is pegged at 80 cents.

Conclusion

With the rise in demand for homes, new household formations and an improving job market in 2016, home building 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.