We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 20% while net sales missed the same by 0.5%. Furthermore, on a year-over-year basis, earnings and net sales decreased 34% and 27%, respectively.
UFP Industries’ earnings topped the consensus mark the trailing four quarters, the average surprise being 22.7%.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter 2023 earnings has moved north to $2.42 per share from $2.40 per share over the past seven days. The estimated figure indicates a 25.1% decrease from the year-ago quarter’s reported earnings of $3.23 per share.
For net sales, the consensus mark is pegged at $2.3 billion, suggesting 20.6% year-over-year decline.
Factors to Note
UFP Industries’ net sales are anticipated to have declined in the second quarter due to tepidness in the Retail and Construction segments. The business of this wood and related products supplier depends on the demand pattern in retail, industrial, and construction markets. The current market scenario reflects slow housing starts owing to high mortgage rates, reduced housing demand and ongoing economic challenges. Given these economic uncertainties, the consumers have become more selective and price conscious, which is reflected in the comparatively lower spending year over year. Also, lumber market volatility and labor constraint are likely to have affected the company’s top-line growth, reflecting lower selling prices.
Based on the business segments, our model predicts a year-over-year decline in the net sales of Retail solutions (comprising of 41.1% of total revenues in first-quarter 2023) by 21.4%, Packaging (comprising of 26.7% of total revenues) by 13.2% and Construction (comprising of 28.3% of total revenues) by 26.9% to $881.3 million, $587.2 million and $713.1 million, respectively.
We predict earnings from operations for Packaging and Construction segments to decline 23.5% to $72.1 million and 48% to $69 million, respectively, year over year. On the other hand, we expect earnings for operations for the Retail segment to increase 35.7% to $33.3 million year over year.
Nonetheless, the company is likely to witness sequential top-line growth due to the low existing house supply. Its investment activities in product and service enhancements and innovations to create value for customers are likely to have been added positives.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for UFP Industries this time around. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: UFPI has an Earnings ESP of -6.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 2.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat for their respective quarters to be reported.
WLDN’s earnings for the to-be-reported quarter are expected to increase 300%. The company reported better-than-expected earnings in two of the last four quarters and missed on two occasions, the average surprise being 1,289.3%.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +5.54% and a Zacks Rank of 3.
LPX’s earnings for the to-be-reported quarter are expected to decline 84.7%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 98.2%.
Howmet Aerospace Inc. (HWM - Free Report) has an Earnings ESP of +1.99% and a Zacks Rank of 2.
HWM is expected to register a 22.9% increase in earnings for the to-be-reported quarter. Notably, the company reported better-than-expected earnings in two of the last four quarters and remained flat on the other two occasions, the average surprise being 4.2%.
Image: Bigstock
Factors Setting the Tone for UFP Industries' (UFPI) Q2 Earnings
UFP Industries, Inc. (UFPI - Free Report) is scheduled to report second-quarter 2023 results on Aug 2, after the closing bell.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 20% while net sales missed the same by 0.5%. Furthermore, on a year-over-year basis, earnings and net sales decreased 34% and 27%, respectively.
UFP Industries’ earnings topped the consensus mark the trailing four quarters, the average surprise being 22.7%.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter 2023 earnings has moved north to $2.42 per share from $2.40 per share over the past seven days. The estimated figure indicates a 25.1% decrease from the year-ago quarter’s reported earnings of $3.23 per share.
UFP Industries, Inc. Price and EPS Surprise
UFP Industries, Inc. price-eps-surprise | UFP Industries, Inc. Quote
For net sales, the consensus mark is pegged at $2.3 billion, suggesting 20.6% year-over-year decline.
Factors to Note
UFP Industries’ net sales are anticipated to have declined in the second quarter due to tepidness in the Retail and Construction segments. The business of this wood and related products supplier depends on the demand pattern in retail, industrial, and construction markets. The current market scenario reflects slow housing starts owing to high mortgage rates, reduced housing demand and ongoing economic challenges. Given these economic uncertainties, the consumers have become more selective and price conscious, which is reflected in the comparatively lower spending year over year. Also, lumber market volatility and labor constraint are likely to have affected the company’s top-line growth, reflecting lower selling prices.
Based on the business segments, our model predicts a year-over-year decline in the net sales of Retail solutions (comprising of 41.1% of total revenues in first-quarter 2023) by 21.4%, Packaging (comprising of 26.7% of total revenues) by 13.2% and Construction (comprising of 28.3% of total revenues) by 26.9% to $881.3 million, $587.2 million and $713.1 million, respectively.
We predict earnings from operations for Packaging and Construction segments to decline 23.5% to $72.1 million and 48% to $69 million, respectively, year over year. On the other hand, we expect earnings for operations for the Retail segment to increase 35.7% to $33.3 million year over year.
Nonetheless, the company is likely to witness sequential top-line growth due to the low existing house supply. Its investment activities in product and service enhancements and innovations to create value for customers are likely to have been added positives.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for UFP Industries this time around. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: UFPI has an Earnings ESP of -6.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 2.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat for their respective quarters to be reported.
Willdan Group, Inc. (WLDN - Free Report) has an Earnings ESP of +108.33% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
WLDN’s earnings for the to-be-reported quarter are expected to increase 300%. The company reported better-than-expected earnings in two of the last four quarters and missed on two occasions, the average surprise being 1,289.3%.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +5.54% and a Zacks Rank of 3.
LPX’s earnings for the to-be-reported quarter are expected to decline 84.7%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 98.2%.
Howmet Aerospace Inc. (HWM - Free Report) has an Earnings ESP of +1.99% and a Zacks Rank of 2.
HWM is expected to register a 22.9% increase in earnings for the to-be-reported quarter. Notably, the company reported better-than-expected earnings in two of the last four quarters and remained flat on the other two occasions, the average surprise being 4.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.