Weyerhaeuser (WY) to Report Q3 Earnings: What to Expect?
Weyerhaeuser CompanyWY is scheduled to report third-quarter 2016 results on Oct 28, before the market opens.
The company delivered better-than-expected results in three of trailing four quarters, while lagging estimates in one. Average earnings surprise was a positive 8.66%. Last quarter, the company's earnings of 17 cents per share lagged the Zacks Consensus Estimate of 20 cents.
Let us see how things are shaping up for Weyerhaeuser prior to this announcement.
Factors to Affect Q3 Results
We believe that Weyerhaeuser has strong fundamentals supporting growth. Its vast product line, wide clientele in the U.S., Canada, Japan, Europe and other regions, as well as its cost-control measures are likely to boost sales and improve margins. In addition, the company divested its liquid packaging board business in the third quarter, and also agreed to permanently shut down its lumber and plywood mill in Columbia Falls, MT. These strategic decisions will enable the company to concentrate on its core timber, land, and forest products business.
Also, the gradually improving housing market in the U.S. is anticipated to support Weyerhaeuser's growth in the quarters ahead. However, the picture was not so promising in the quarter, with a fall in month-on-month housing starts numbers in August and September offsetting the gain recorded in July. Moreover, the company's growth prospects are susceptible to risks related to unfavorable foreign currency movements, geopolitical issues and stiff competition from other players in the industry.
Over the last 60 days, the Zacks Consensus Estimate for Weyerhaeuser has decreased 8.3% to 22 cents for the quarter.
Our proven model does not conclusively show that Weyerhaeuser will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
That is not the case here as you will see below.
Zacks ESP: Weyerhaeuser currently has an Earnings ESP of 0.00% for the third quarter. This is because the Most Accurate Estimate and the Zacks Consensus Estimate currently stand at 22 cents.
Zacks Rank: Weyerhaeuser's Zacks Rank #2 when combined with 0.00% ESP makes an earnings beat uncertain this quarter.
WEYERHAEUSER CO Price and EPS Surprise
Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are companies in the building industry you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Louisiana-Pacific Corp. LPX , with an Earnings ESP of +2.50% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .
GMS Inc. GMS , with an Earnings ESP of +4.17% and a Zacks Rank #2.
Tile Shop Holdings, Inc. TTS , with an Earnings ESP of +11.11% and a Zacks Rank #2.
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