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Metal Stocks’ Q3 Earnings to Watch on Oct 19: VMI, KALU

Zacks

The third-quarter earnings season is in its early stage with 34 companies on the S&P 500 index having reported their quarterly numbers thus far. The growth picture is tepid as Q3 earnings are expected to take a dip despite an impressive start by major banks.

Per the latest Earnings Preview report, factoring in the actual results from the S&P 500 members that reported till last Friday, total Q3 earnings are expected to fall 2.2% year over year while revenues are expected to rise 1.5%.

This, if it happens, will mark the sixth straight quarter of earnings decline for the benchmark index. The Energy sector is likely to play spoilsport with its total earnings forecast to plunge 71.9% year over year on 11% lower revenues.

In this write-up, we put the spotlight on a couple of metal companies that are schedule to report on Oct 19. The metal industry falls under the broader Basic Materials sector. Among the eight out of the 16 Zacks sectors expected to see a fall in earnings this reporting cycle, the Basic Materials sector is one as it is projected to witness an earnings decline of 1.5% on 3.1% lower sales.

We take a sneak peek at two metal companies that are gearing up to report their third-quarter results on Wednesday, Oct 19.

Valmont Industries, Inc. VMI, slated to report after the close, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.50. The company carries a favorable Zacks Rank #3 (Hold), but its 0.00% ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Notably, Valmont delivered an average positive surprise of 5.25% in the trailing four quarters. While the prevailing external environment remains challenging for Valmont, the company's results should benefit from its restructuring actions, acquisitions, cost management and focus on operational improvements. Restructuring actions that the company executed last year and other cost-saving measures are also expected to support its earnings in Q3.

VALMONT INDS Price and EPS Surprise

VALMONT INDS Price and EPS Surprise | VALMONT INDS Quote


Kaiser Aluminum Corporation KALU, which will report after the bell, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.23. The company carries a Zacks Rank #4 (Sell), which we caution against ahead of an earnings release.

Kaiser Aluminum missed the Zacks Consensus Estimate in three of the trailing four quarters with an average negative surprise of 16.76%.

KAISER ALUMINUM Price and EPS Surprise

KAISER ALUMINUM Price and EPS Surprise | KAISER ALUMINUM Quote

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