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Construction Stock Earnings on Feb 8: JEC, OC, CAA, RYN

The fourth-quarter earnings season is well under way and has seen releases from 53.8% of the construction companies in the S&P 500 cohort. According to the latest Earnings Preview report, 71.4% of the companies have surpassed earnings as well as revenue expectations. Total earnings at these construction companies increased 10.2% on 10.7% higher revenues.

The sector is expected to witness earnings growth of 12.5% on 6.6% revenue growth in the quarter.

Although the momentum at the start of 2017 seems to have lost steam as mortgage rates have been inching up since the November presidential election, sales of new homes grew 12.2% in 2016 from a year earlier - marking the best in a decade. Sales growth during 2016 was majorly boosted by affordable mortgage rates and a steadily improving job market.

A healthier economy, improving employment levels, positive consumer confidence and a tight supply situation raise optimism about the sector's performance in 2017.

So far, some of the leading companies in the construction sector have reported their Q4 results. Among them, M.D.C. Holdings Inc. (MDC) reported fourth-quarter 2016 earnings of 78 cents per share, beating the consensus mark by 10 cents. The homebuilder also posted revenues of $736.3 million in the quarter, surpassing the Zacks Consensus Estimate of $680 million.

Let us take a look at how these four construction companies are placed ahead of their quarterly releases on Feb 8.

Jacobs Engineering Group Inc.JEC is scheduled to release first-quarter fiscal 2017 (ended Dec 31, 2016) numbers, before the opening bell. The company is one of the world's largest and most diverse providers of technical, professional, and construction services.

Jacobs' business exposure in diversified end markets is expected to boost financials in the fiscal first quarter. Increased transportation spending of the government authorities of Australia and the U.K., higher demand for power generation services, rise in aviation demand and growth in spending of biopharmaceutical majors would likely boost Jacobs' revenues in the quarter under review. Also, the company believes that margins in the to-be-reported quarter would improve on the back of better cost management and strategic restructuring initiatives.

The company has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy).

Our model suggests that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) to beat earnings. In this case, our proven model does not conclusively show that Jacobs is likely to beat earnings this quarter.

In the last reported quarter, the company's reported earnings were in line with the Zacks Consensus Estimate. Notably, the company surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings beat of 7.19% (read more: Jacobs Q1 Earnings: What's in Store for the Stock? )

Jacobs Engineering Group Inc. Price and EPS Surprise

Jacobs Engineering Group Inc. Price and EPS Surprise | Jacobs Engineering Group Inc. Quote

Headquartered in Toledo, OH, Owens CorningOC develops, manufactures and markets insulation, roofing, and fiberglass composites. The company, which will report fourth quarter 2016 results, has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

Last quarter, the company posted a positive earnings surprise of 10.10%. The company reported positive earnings surprises in all of the past four quarters, with an average beat of 43.12%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 61 cents a share, reflecting a decrease of 7.3% year over year, while the consensus for revenues is at $1.31 billion, implying 0.9% year-over-year growth.

Owens Corning Inc Price and EPS Surprise

Owens Corning Inc Price and EPS Surprise | Owens Corning Inc Quote

CalAtlantic Group, Inc.CAA , a homebuilder, is slated to report its fourth-quarter 2016 numbers after the closing bell.

Last quarter, the company posted a positive earnings surprise of 3.19%. The company surpassed estimates in three of the past four quarters and has an average positive surprise of 14.79%.

Our proven model does not conclusively predict an earnings beat for CalAtlantic this quarter as it has a Zacks Rank #2 and an Earnings ESP of 0.00%.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $1.08, reflecting a 3.9% year-over-year rise, while the consensus for revenues is at $1.98 billion, implying 18% year-over-year growth.

CalAtlantic Group, Inc. Price and EPS Surprise

CalAtlantic Group, Inc. Price and EPS Surprise | CalAtlantic Group, Inc. Quote

Rayonier Inc.RYN will report its fourth-quarter 2016 after market close. Rayonier is a timberland real estate investment trust with assets located in some of the most productive timber growing regions in the U.S. and New Zealand.

The company's timberland portfolio is situated in the productive timber-producing regions of the U.S. In addition, the favorable demand-supply dynamics have enhanced its pricing power.

The company constantly attempts to raise its timberland base through disciplined deals. Also, the recent developments in biogenetics & cloning, which are boosting rapid growth of trees, are expected to drive its growth.

Last quarter, the company posted a positive earnings surprise of 135.71%. The company surpassed estimates in all of the past four quarters and has an average positive surprise of 83.78%.

Our proven model does not show that Rayonier will beat earnings this quarter as it has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 3 cents, reflecting a 63.9% year-over-year decline, while the consensus for revenues is at $130.2 million, implying a 5% year-over-year decline.

Rayonier Inc. Price and EPS Surprise

Rayonier Inc. Price and EPS Surprise | Rayonier Inc. Quote

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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