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Heavy Construction Stocks' Q2 Earnings Lined Up: MTZ & More

The Q2 earnings season has already crossed its midway point, with around 63.4% of the S&P 500 members having reported their results as of Jul 29, 2016 (per the latest Earnings Preview report).

It seems growth for the benchmark S&P 500 index is headed to be in negative territory for the fifth quarter in a row, with total Q2 earnings projected to be down 3.4% year over year on 0.4% lower revenues, stemming from soft macroeconomic conditions and a languid energy sector. Moreover, tension in the global financial markets triggered by the unexpected Brexit vote and choppy oil prices remain major drags.

According to the Zacks Industry classification, the heavy construction industry is broadly grouped under the construction sector - one of the 16 broad Zacks sectors. The construction sector seems to be scoring well in this tepid scenario, with earnings up 14.3% on 11.3% higher revenues. Of the stocks that have reported earnings so far in the sector, 57.1% beat EPS estimates while 42.9% surpassed revenue estimates as of Jul 27.

We anticipate double-digit earnings growth of 11.5% for the sector in this quarter, gaining from a healthy home-remodeling market, supported by strong job data and rising consumer confidence. Further, recently released housing data has been fairly upbeat and a tight supply situation raises spirits about the sector's performance for the rest of 2016.

With the construction sector gaining momentum, it makes sense to pick stocks from this space. Among several other index members yet to release results, let's see what's in store for the following four major heavy construction stocks gearing up to release their quarterly numbers on Aug 4.

MasTec, Inc.MTZ is one of the largest providers of construction services to the telecommunications industry in the U.S. The company's principal business comprises installation and maintenance of aerial, underground and buried copper and fiber optic cable, underground conduit and manhole systems.

Last quarter, MasTec had posted a positive surprise of 100%. The company surpassed estimates in two out of the past four quarters and has an average positive surprise of 35.27%. The Zacks Consensus Estimate for the quarter is pegged at 20 cents.

MASTEC INC Price and EPS Surprise

MASTEC INC Price and EPS Surprise | MASTEC INC Quote

The combination of MasTec's Zacks Rank #2 (Buy) and a 0.00% Earnings ESP makes surprise prediction difficult.

Orion Group Holdings, Inc.ORN is a construction company which provides services on and off shore primarily in the continental U.S., Alaska, Canada and the Caribbean Basin. The company's operating segments consist of heavy civil marine construction segment and commercial concrete segment.

Orion Group Holdings had recorded a negative surprise of 100% in the previous quarter. The company surpassed estimates in two out of the past four quarters and has an average negative surprise of 42.56%. Analysts polled by Zacks expect the company to break even in the second quarter.

ORION GROUP HLD Price and EPS Surprise

ORION GROUP HLD Price and EPS Surprise | ORION GROUP HLD Quote

Moreover, its Zacks Rank #3 (Hold) and Earnings ESP of 0.00% do not conclusively show that the stock is likely to beat earnings estimates this quarter.

Primoris Services CorporationPRIM operates as one of the largest-specialty contractors and infrastructure companies in the U.S. The company provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities, and other customers.

Primoris Services posted a negative surprise of 16.67% in first-quarter 2016. Moreover, the company has an average negative surprise of 26.21% over the trailing four quarters. The Zacks Consensus Estimate for the quarter is pegged at 25 cents.

PRIMORIS SERVCS Price and EPS Surprise

PRIMORIS SERVCS Price and EPS Surprise | PRIMORIS SERVCS Quote

The company has a Zacks Rank #3 (Hold), which, along with a negative Earnings ESP of 16.00%, makes an earnings beat unlikely this season.

Great Lakes Dredge & Dock CorporationGLDD is the largest provider of dredging services in the U.S., conducting business to maintain and deepen shipping channels, reclaim land from the ocean and re-nourish storm-damaged coastline. The company also conducts around 25% of its operations internationally with a strong focus in the Middle East.

Last quarter, Great Lakes Dredge & Dock posted a negative surprise of 75%. Moreover, the company has an average negative surprise of 76.53% over the trailing four quarters. The Zacks Consensus Estimate for the quarter is pegged at 1 cent.

GREAT LAKES DRG Price and EPS Surprise

GREAT LAKES DRG Price and EPS Surprise | GREAT LAKES DRG Quote

Once again, it is difficult to conclusively predict an earnings beat for the company this quarter, given the company's Zacks Rank #3 and Earnings ESP of 0.00%.

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GREAT LAKES DRG (GLDD): Free Stock Analysis Report

MASTEC INC (MTZ): Free Stock Analysis Report

ORION GROUP HLD (ORN): Free Stock Analysis Report

PRIMORIS SERVCS (PRIM): 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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