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Will Weyerhaeuser (WY) be Able to Top Q1 Earnings Estimates?
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Weyerhaeuser Company (WY - Free Report) is scheduled to report first-quarter 2017 results on Apr 28, before the market opens.
Over the last three months, the company’s shares yielded 8.87% return, outperforming the gain of 1.25% recorded by the Zacks categorized Building Products industry.
The company posted better-than-expected results in two of the last four quarters while lagging estimates in two. Average earnings surprise was a positive 0.72%. Let us see how things are shaping up for Weyerhaeuser prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Weyerhaeuser is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. This is the case here as elaborated below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: Weyerhaeuser currently has an Earnings ESP of +5.56% for the quarter. This is because the Most Accurate estimate of 19 cents is above the Zacks Consensus Estimate of 18 cents.
Zacks Rank: Weyerhaeuser’s Zacks Rank #3 when combined with a positive ESP makes an earnings beat prediction possible this quarter.
Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
What’s Driving an Upbeat Q1 Results?
Weyerhaeuser’s businesses are highly dependent on the housing market activities in the U.S. Notably, this industry has been steadily improving over time, with the latest U.S. Census Bureau report revealing a 9.2% year-over-year increase in housing starts in Mar 2017. Also, housing completions in the months grew 13.4%. Housing starts grew 6.2% and 10.5% year over year in February and January, respectively, while rose 4.9% in full-year 2016.
For the first quarter, the company predicts sequentially higher earnings for the Wood Products segment on the back of higher sales volumes, comparable sales realizations for lumber and oriented strand board, improvement in operating rates and manufacturing costs. We believe that improving housing market activities must support the company’s projection.
Also, we believe that strategic decisions taken by Weyerhaeuser in 2016, especially divestments of the printing papers company, North Pacific Paper Company and Cellulose Fibers pulp mills, will prove beneficial in the quarter. In addition, the company aims to reap collective benefit of $40−$50 million in the Timberland segment, $20−$25 million in oriented strand board (OSB), $20−$25 million in lumber, $10−$15 million in engineered wood products and $5−$10 million in distribution in the quarters of 2017.
Other Stocks to Consider
Here are some other companies in the construction sector you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Potlatch Corporation (PCH - Free Report) , with an Earnings ESP of +29.17% and a Zacks Rank #3.
Boise Cascade, L.L.C. (BCC - Free Report) with an Earnings ESP of +44.44% and a Zacks Rank #3.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
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Will Weyerhaeuser (WY) be Able to Top Q1 Earnings Estimates?
Weyerhaeuser Company (WY - Free Report) is scheduled to report first-quarter 2017 results on Apr 28, before the market opens.
Over the last three months, the company’s shares yielded 8.87% return, outperforming the gain of 1.25% recorded by the Zacks categorized Building Products industry.
The company posted better-than-expected results in two of the last four quarters while lagging estimates in two. Average earnings surprise was a positive 0.72%. Let us see how things are shaping up for Weyerhaeuser prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Weyerhaeuser is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. This is the case here as elaborated below.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.)
Zacks ESP: Weyerhaeuser currently has an Earnings ESP of +5.56% for the quarter. This is because the Most Accurate estimate of 19 cents is above the Zacks Consensus Estimate of 18 cents.
Weyerhaeuser Company Price and EPS Surprise
Weyerhaeuser Company Price and EPS Surprise | Weyerhaeuser Company Quote
Zacks Rank: Weyerhaeuser’s Zacks Rank #3 when combined with a positive ESP makes an earnings beat prediction possible this quarter.
Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
What’s Driving an Upbeat Q1 Results?
Weyerhaeuser’s businesses are highly dependent on the housing market activities in the U.S. Notably, this industry has been steadily improving over time, with the latest U.S. Census Bureau report revealing a 9.2% year-over-year increase in housing starts in Mar 2017. Also, housing completions in the months grew 13.4%. Housing starts grew 6.2% and 10.5% year over year in February and January, respectively, while rose 4.9% in full-year 2016.
For the first quarter, the company predicts sequentially higher earnings for the Wood Products segment on the back of higher sales volumes, comparable sales realizations for lumber and oriented strand board, improvement in operating rates and manufacturing costs. We believe that improving housing market activities must support the company’s projection.
Also, we believe that strategic decisions taken by Weyerhaeuser in 2016, especially divestments of the printing papers company, North Pacific Paper Company and Cellulose Fibers pulp mills, will prove beneficial in the quarter. In addition, the company aims to reap collective benefit of $40−$50 million in the Timberland segment, $20−$25 million in oriented strand board (OSB), $20−$25 million in lumber, $10−$15 million in engineered wood products and $5−$10 million in distribution in the quarters of 2017.
Other Stocks to Consider
Here are some other companies in the construction sector you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Louisiana-Pacific Corporation (LPX - Free Report) , with an Earnings ESP of +27.59% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Potlatch Corporation (PCH - Free Report) , with an Earnings ESP of +29.17% and a Zacks Rank #3.
Boise Cascade, L.L.C. (BCC - Free Report) with an Earnings ESP of +44.44% and a Zacks Rank #3.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
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