Vulcan Materials Company
) to beat expectations when it reports first-quarter 2014 results
on May 6. Last quarter, the company delivered an astounding
positive earnings surprise of 333.33%. Let's see how things are
shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Vulcan Materials is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +5.88%. This
is very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Vulcan Materials carries a Zacks Rank #1 (Strong Buy) which, when
combined with +5.88% ESP, makes us confident about a positive
Note that stocks with Zacks Rank #1, 2 or 3 have a
significantly higher chance of beating earnings. The Sell-rated
stocks (#4 and 5) should never be considered going into an
What is Driving the Better-Than-Expected Earnings?
The construction aggregates producer's second-half 2013
revenues and profits increased significantly from the first half
as improving private construction activity and better weather
conditions markedly raised volumes in all its segments. Volumes
improved 8% in the second half.
Additionally, most of the volume and pricing increase was
noted in the aggregates segment, which was sluggish in 2012 as
well as in the first half of 2013. Strong volume and pricing
growth coupled with aggressive cost control also significantly
improved earnings and profitability in the second half.
Management expects aggregates demand and volumes to increase
in 2014 led by private construction projects, though uncertainty
exists in public construction market. Strong growth potential in
Vulcan's served markets (Arizona, California, Florida, Georgia
and Texas) and the meaningful operating leverage that exists in
the aggregates business are expected to drive earnings growth and
cash generation in 2014 as volumes improve.
Moreover, margins are expected to improve further in 2014
driven by volume and pricing growth as well as solid cost control
and operating efficiencies from the profit enhancement
Other Stocks to Consider
Other stocks in building/construction sector that have both a
positive Earnings ESP and a favorable Zacks Rank are:
Martin Marietta Materials Inc.
), with Earnings ESP of +4.00% and a Zacks Rank #2 (Buy).
), with Earnings ESP of +7.14% and a Zacks Rank #3 (Hold).
D.R. Horton, Inc.
), with Earnings ESP of +2.13% and a Zacks Rank #3.
D R HORTON INC (DHI): Free Stock Analysis
MARTIN MRT-MATL (MLM): Free Stock Analysis
TEXAS INDS (TXI): Free Stock Analysis Report
VULCAN MATLS CO (VMC): Free Stock Analysis
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