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Construction Stock Q3 Earnings Due on Nov 1: FLR, PWR & More

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After a string of third-quarter earnings releases by a number of construction companies so far, including EMCOR Group, Inc. (EME - Free Report) , KBR, Inc. (KBR - Free Report) , Vulcan Materials Company (VMC - Free Report) and PulteGroup, Inc. (PHM - Free Report) , we are gearing up for the next onslaught of reports through this week.

Increased construction spending in the United States, state-of-the-art construction and engineering services, solid job market scenario, moderate inflation, along with Trump’s impetus to boost infrastructure spending seem to be the vital growth catalysts for the industry. Construction work for communications is also expected to gain strong momentum, given huge network investments.

Again, increasing defense spending in major economies like the United States, elevated public investment in worldwide transportation, water infrastructure and utility plant, as well as business prospects in the healthcare market are anticipated to drive growth for the industry in the coming quarters.

However, higher raw material costs, concerns surrounding trade tensions, rising freight expenses, volatility in commodity prices and the cyclical nature of the industry’s commodity-based business lines pose significant challenges in the forthcoming quarters.

Strong Construction Activity Leads to Bullish Expectations

Overall, third-quarter earnings growth is expected to be in double-digits territory for 10 of the 16 Zacks sectors. Construction along with Energy, Finance, Construction, Basic Materials and Technology sectors are likely to register the strongest growth.

Per the Earnings Trends report dated Oct 24, the Construction sector is anticipated to register earnings growth of 36.8% from third-quarter 2017 and the top line is likely to grow 19.5% from the year-ago level.

Construction Stocks Reporting on Nov 1

Four companies from the construction sector are set to report third-quarter 2018 results on Nov 1. Let's see how things are shaping up for their respective announcements.

Our research shows that when a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) stock is combined with a positive Earnings ESP, the chance of beating earnings estimates is high. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Fluor Corporation (FLR - Free Report) is scheduled to report quarterly results on Nov 1. In the last reported quarter, the company’s earnings came in at 81 cents per share, beating the Zacks Consensus Estimate of 69 cents by 17.4%. In fact, Fluor surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering average positive surprise of 3.3%.

However, we cannot conclusively predict a beat for the company in the third quarter as it has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

For the quarter to be reported, the Zacks Consensus Estimate is currently pegged at 58 cents, trending downward over the past 30 days. This also reflects a decrease of 13.4% from the year-ago earnings of 67 cents per share. Revenues are expected to be $4.61 million, down 6.7% year over year (Read more: Fluor Gears Up for Q3 Earnings: What's in the Cards?).

Fluor Corporation Price and EPS Surprise

 

Fluor Corporation Price and EPS Surprise | Fluor Corporation Quote

Quanta Services, Inc. (PWR - Free Report) is scheduled to report quarterly numbers before the opening bell. The company reported better-than-expected results in three of the last four quarters, with the average positive earnings surprise being 7.7%.

We cannot conclusively predict a beat for the company in the third quarter as it has an Earnings ESP of 0.00% and a Zacks Rank #3.

For the quarter to be reported, the Zacks Consensus Estimate is currently pegged at $1.02 per share, trending downward over the past 60 days. However, the estimate reflects 61.9% year-over-year growth. Total revenues are expected to be $2.96 billion, up 13.3% year over year (Read more: What's in the Cards for Quanta Services' Q3 Earnings?).

Quanta Services, Inc. Price and EPS Surprise

 

Quanta Services, Inc. Price and EPS Surprise | Quanta Services, Inc. Quote

MasTec, Inc. (MTZ - Free Report) is scheduled to report quarterly results after the closing bell. In the last reported quarter, the company’s earnings came in at $1.04 per share, beating the Zacks Consensus Estimate of $1.03 by 1%. It beat earnings estimates in all of the past four quarters, with average negative surprise of 24.5%.

Meanwhile, our proven model hints at an earnings beat for the company in the to-be-reported quarter, as MasTec has an Earnings ESP of +2.2% and Zacks Rank #2.

For the quarter to be reported, the Zacks Consensus Estimate is currently pegged at $1.23, trending upward over the past 30 days. This reflects an increase of 50% from the year-ago earnings of 82 cents per share. Revenues are expected to be $1.98 million, up 1.4% year over year (Read more: MasTec Gears Up for Q3 Earnings: What's in the Cards?).
 

MasTec, Inc. Price and EPS Surprise

 

MasTec, Inc. Price and EPS Surprise | MasTec, Inc. Quote

Gates Industrial Corporation plc (GTES - Free Report) is scheduled to report quarterly results after the closing bell. In the last reported quarter, the company’s earnings came in at 38 cents per share, beating the Zacks Consensus Estimate of 30 cents by 26.7%.

We cannot conclusively predict a beat for the company in the third quarter as it has an Earnings ESP of 0.00% and a Zacks Rank #3.

Overall, for the third quarter, the Zacks Consensus Estimate for earnings is pegged at 26 cents. The consensus estimate for revenues is pegged at $835.3 million.

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