The third-quarter earnings season has started on an upbeat note, thanks to solid results from the big banks. Total earnings for the 34 S&P 500 members that reported till last Friday were up 1.3% year over year on 2.9% higher revenues, per the latest Earnings Preview report.
Notwithstanding the positive start, the overall growth picture is still drab due to weaknesses across the energy, auto and transportation sectors. Total Q3 earnings are expected to fall 2.2% year over year while revenues are expected to rise 1.5%. This, if it happens, will mark the sixth straight quarter of earnings decline for the benchmark index.
A few companies in the basic materials space are lined up to report their quarterly numbers on Thursday, Oct 20. Among the eight out of the 16 Zacks sectors expected to see a fall in earnings this reporting cycle, the Basic Materials sector is one as it is projected to witness an earnings decline of 1.5% on 3.1% lower sales. Weak commodity prices, sluggish economic conditions in some emerging nations and low demand in the energy sector remain the major concerns.
Let's take a peek into three basic materials stocks that are slated to report their quarterly results on Oct 20. PPG Industries, Inc. PPG
, which will report ahead of the opening bell, has an Earnings ESP
of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.56. The company carries a Zacks Rank #4 (Sell), which we caution against ahead of an earnings release. PPG Industries surpassed the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 0.33%.
PPG Industries faces a number of headwinds, stemming from a sluggish global economy. The company is facing weakness in the heavy-duty equipment market in the industrial coatings business. Moreover, softness in the marine new-build market, along with weak demand in the oil and gas end-use market, has been hurting protective and marine coatings' sales. The company's earnings are also heavily exposed to unfavorable currency fluctuations. (Read more: Is PPG Industries Set to Disappoint in Q3 Earnings?
PPG INDS INC Price and EPS Surprise
PPG INDS INC Price and EPS Surprise | PPG INDS INC Quote
Clearwater Paper Corporation CLW , which is slated to report after the bell, has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate both stand at 15 cents. The stock carries a favorable Zacks Rank #3 (Hold), but its 0.00% ESP makes surprise prediction difficult. Clearwater Paper posted positive earnings surprises in three of the trailing four quarters with an average beat of 5.69%. You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
CLEARWATER PAPR Price and EPS Surprise
CLEARWATER PAPR Price and EPS Surprise | CLEARWATER PAPR Quote
Nucor Corporation NUE , which will report before the bell, has an Earnings ESP of -1.11% as the Most Accurate Estimate stands at 89 cents while the Zacks Consensus Estimate is pegged at 90 cents. The company carries a Zacks Rank #4, which we caution against ahead of an earnings release. Nucor posted positive earnings surprises in three of the trailing four quarters with an average beat of 34.94%.
While Nucor should gain from improved steel prices, it remains exposed to a number of macroeconomic headwinds. The company is facing soft demand across energy, heavy equipment and agricultural markets. Notwithstanding some improvements in the recent past, the steel industry is still not out of the woods. The U.S. steel industry remains under the risk of cheaper imports despite some recent favorable developments on the import front. (Read more: Nucor Q3 Earnings: Will the Stock Disappoint? )
NUCOR CORP Price and EPS Surprise
NUCOR CORP Price and EPS Surprise | NUCOR CORP Quote
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