), a manufacturer of home improvement and building products, to
beat expectations when it reports first quarter 2013 results on
Why a Likely Positive Surprise?
Our proven model shows that Masco is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at +23.08%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #2 (Buy):
Masco carries a Zacks Rank #2 (Buy). Note that stocks with Zacks
Ranks of #1, #2 and #3 have a significantly higher chance of
beating earnings. The sell rated stocks (#4 and #5) should never
be considered going into an earnings announcement.
The combination of Masco's Zacks Rank #2 and +23.08% ESP makes us
very confident in looking for a positive earnings beat on Apr 30.
What is Driving the Better Than Expected
Masco is expected to witness strong first quarter 2013
performance on the back of its improving North American business,
turnaround efforts and profit improvement initiatives.
North American sales are gaining momentum attributable to
increasing new home construction activity, new product launches
and pricing growth. The new home construction activity in North
America is benefiting from improved demand and affordability of
homes, owing to low mortgage rates, increased rentals and rising
Masco had adopted several strategic initiatives, in order to
strengthen its business. The initiatives include the improvement
of underperforming businesses like Installation and Cabinet;
leveraging its brands, new product introduction and product
innovation, and initiatives to reduce costs and strengthen its
The company is already benefiting from the above mentioned
factors. As such, one can see the positive trend in the trailing
four-quarter average surprise of 166.41%, which was greatly
helped by the 500.0% surprise in the last-reported quarter. These
factors are expected to further drive the company's profit in the
Other Stocks to Consider
Masco is not the only firm looking up this earnings season. We
also see likely earnings beats coming from these 3 companies from
the same industry:
), Earnings ESP of +33.33% and Zacks Rank #2
United Rentals, Inc.
), Earnings ESP of +2.94% and Zacks Rank #3 (Hold)
), Earnings ESP of +2.17% and Zacks Rank #3
AEGION CORP (AEGN): Free Stock Analysis
HEADWATERS INC (HW): Free Stock Analysis
MASCO (MAS): Free Stock Analysis Report
UTD RENTALS INC (URI): Free Stock Analysis
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