Construction Partners (ROAD) To Post Q3 Earnings: What's Up?
Zacks Investment Research | Aug 04, 2019 09:54PM ET
Construction Partners, Inc. (NASDAQ:ROAD) is set to report third-quarter fiscal 2019 results on Aug 8, after the closing bell.
In the last reported quarter, the company’s top and bottom lines outpaced the Zacks Consensus Estimate by 13.2% and 60%, respectively. In fact, its earnings topped the consensus mark in three of the trailing four quarters, recording average positive surprise of 11.88%, buoyed by solid inorganic drive and higher demand for road construction across 31 markets served.
Which Way are Estimates Trending?
For the quarter to be reported, the Zacks Consensus Estimate for earnings has remained unchanged over a month at 30 cents per share. The figure indicates a gain of 3.5% from 29 cents per share reported in the year-ago quarter. Revenues are expected to be $230.5 million, suggesting 18.2% year-over-year growth.
Factors That Might Influence Upcoming Quarterly Results
Construction Partners’ organic and inorganic growth opportunities in the attractive southeastern U.S. road construction/repair market are expected to help the company generate higher revenues in the fiscal third quarter. Favorable project demand in the markets served and higher state funding to support infrastructure projects are expected to act as the biggest catalysts for the to-be-reported quarter. It remains on track to earn 60% of annual revenues in the second half of fiscal 2019, given normal weather patterns, longer workdays and other factors.
It completed three acquisitions, which are likely to have benefited Construction Partners in the quarter to be reported, in a year’s time (ended Mar 31, 2019). Notably, in late February, the company announced two strategic acquisitions; a liquid asphalt terminal in Panama City, FL and an asphalt production and paving company in South Central, FL. The liquid asphalt terminal buyout was part of the company’s vertical integration strategy and enabled it to supply liquid asphalt in the southern portion of its geographic footprint including Florida, Alabama and Georgia.
As of Mar 31, 2019, backlog was $584.8 million. Of this amount, 65% or approximately $380.8 million is expected to be completed during this fiscal. The company’s healthy backlog is expected to drive revenues in the quarter.
Overall, the company’s competitive advantages, comprising vertically integrated operations, scale, strong position in hot mix asphalt production, a robust backlog, and strong growth via organic and acquisition strategies, are likely to aid fiscal third-quarter results.
Here is What Our Quantitative Model Predicts:
Our proven model shows that Construction Partners is unlikely to beat on earnings in the to-be-reported quarter. That is because a stock needs to have both a positive Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.