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Construction Stock Q4 Earnings on Feb 14: MLM, WSO, CCS

The Q4 earnings season has so far seen quarterly releases from 76.9% of the construction companies in the S&P 500 cohort. According to the latest Earnings Preview report, 60% of the companies have surpassed earnings as well as revenue expectations. Total earnings at these construction companies increased 7.7% and total revenues rose 6.5%.

As the U.S. homebuilding market staged a striking comeback in Dec 2016, it is likely that the housing market may have contributed to economic growth in the fourth quarter. Positives like 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. PulteGroup Inc.'s (PHM) fourth-quarter 2016 adjusted earnings beat the Zacks Consensus Estimate by 15.5% while total revenue of $2.49 billion surpassed the mark by 6.9%. D.R. Horton, Inc. (DHI) exhibited an impressive performance in the first quarter of fiscal 2017 , with earnings and revenues beating the Zacks Consensus Estimate by 17% and 6.8%, respectively. KB Home (KBH) reported fourth-quarter 2016 numbers wherein earnings surpassed analysts' expectations by 8.1% and revenues by 2%.

Let us take a look at how these three construction companies are placed ahead of their fourth-quarter 2016 earnings release on Feb 14.

Martin Marietta Materials, Inc.MLM , a producer of aggregates for the construction industry, is scheduled to report before the opening bell.

Last quarter, the company posted a negative earnings surprise of 5.68%. Meanwhile, it missed estimates in three out of the past four quarters and has an average negative surprise of 23.97%.

Our proven model does not conclusively show a beat for Martin Marietta, as the company has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. This is because the company's Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.65. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Martin Marietta Materials, Inc. Price and EPS Surprise

Martin Marietta Materials, Inc. Price and EPS Surprise | Martin Marietta Materials, Inc. Quote

Per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat earnings.

Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $1.65, reflecting a 43.9% year-over-year increase. Meanwhile, our estimate for revenues is pegged at $887.6 million, implying a 13.4% increase (read more: Can Martin Marietta Pull a Surprise in Q4 Earnings? )

Watsco, Inc.WSO , one of the largest distributors of air conditioning, heating equipment and related parts in the U.S., is slated to report before the market opens.

Last quarter, Watsco missed earnings estimates by 6.3%. The company surpassed estimates in only one of the past four quarters, with an average miss of 4.2%.

Watsco has a Zacks Rank #2 and an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 87 cents. Thus, our proven model does not conclusively show a beat for Watsco.

Watsco, Inc. Price and EPS Surprise

Watsco, Inc. Price and EPS Surprise | Watsco, Inc. Quote

The Zacks Consensus Estimate for the quarter's earnings is pegged at 87 cents, up 15.5% year over year. The consensus for revenues is at $950.96 million, implying 5.2% year-over-year growth.

Home building and construction company Century Communities, Inc.CCS is slated to report after market close.

In the preceding quarter, the company posted a positive earnings surprise of 5%. The company surpassed earnings in all of the preceding four quarters, with an average beat of 5.1%.

Our proven model shows that Century Communities is likely to beat earnings because it has the perfect combination of an Earnings ESP of +14.93% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Century Communities, Inc. Price and EPS Surprise

Century Communities, Inc. Price and EPS Surprise | Century Communities, Inc. Quote

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 67 cents, reflecting growth of 8.1% year over year, while the consensus for revenues is at $273.36 million, indicating a 32.5% year-over-year increase.

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Watsco, Inc. (WSO): Free Stock Analysis Report

Martin Marietta Materials, Inc. (MLM): Free Stock Analysis Report

Century Communities, Inc. (CCS): Free Stock Analysis Report

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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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