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Great Lakes (GLDD) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

Great Lakes Dredge & Dock Corporation GLDD is slated to report third-quarter 2019 results on Nov 5. This largest provider of dredging services in the United States has a strong record of earnings surprises, having surpassed the Zacks Consensus Estimate in the trailing six quarters.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 50%. Second-quarter earnings of 18 cents per share turned around from a loss of 2 cents in the year-ago period.

Quarterly revenues of $184.8 million, however, missed analysts’ expectation by 10.9%. Nonetheless, the said figure increased 36.6% from the prior-year quarter, backed by strong project execution throughout the domestic fleet.

Which Way are Estimates Trending?

Let’s take a look at the estimate revision trend in order to get a clear picture of what analysts are thinking about the company prior to the earnings release.

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been unchanged at 13 cents over the past 30 days. The estimated figure indicates a decrease of 27.8% from 18 cents per share reported in the year-ago quarter.

Great Lakes Dredge & Dock Corporation Price and EPS Surprise

Great Lakes Dredge & Dock Corporation Price and EPS Surprise
Great Lakes Dredge & Dock Corporation Price and EPS Surprise

Great Lakes Dredge & Dock Corporation price-eps-surprise | Great Lakes Dredge & Dock Corporation Quote

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Factors to Consider

Strong bidding activity on port/channel deepening projects and coastal protection/beach nourishment projects is expected to have contributed to its third-quarter revenues. In fact, solid backlog ($498.1 million as of Jun 30, 2019), higher contribution from dredging businesses in domestic and international markets, high equipment utilization, solid maintenance dredging operations, along with improved project execution are likely to have helped Great Lakes to generate higher revenues. This apart, strong performance of rivers & lakes projects is expected to have reflected in its financials.

However, increase in G&A expense owing to higher incentive compensation is expected to have impacted margins. Also, divestiture of the Environmental & Infrastructure or E&I business (completed in the second quarter) is expected to have resulted in an additional loss.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Great Lakes this time around. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive surprise. This is not the case here, as you will see below.

Earnings ESP: Great Lakes has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some construction companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in the upcoming releases:

Advanced Drainage Systems, Inc. WMS has an Earnings ESP of +11.77% and holds a Zacks Rank #2.

Continental Building Products, Inc. CBPX has an Earnings ESP of +3.95% and carries a Zacks Rank #3.

Jacobs Engineering Group Inc. JEC has an Earnings ESP of +0.97% and a Zacks Rank #2.

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Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.5% per year. So be sure to give these hand-picked 7 your immediate attention.

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Advanced Drainage Systems, Inc. (WMS) : Free Stock Analysis Report
 
Continental Building Products, Inc. (CBPX) : Free Stock Analysis Report
 
Great Lakes Dredge & Dock Corporation (GLDD) : Free Stock Analysis Report
 
Jacobs Engineering Group Inc. (JEC) : Free Stock Analysis Report
 
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Zacks Investment Research