Masco Corporation (MAS Quick Quote – ) plans to announce results before the opening bell on February 8.

In the last reported quarter, the company's revenue and profit beat the Zacks Consensus Estimate by 4.7% and 13.8%, respectively. Net sales increased 11.1 percent due to strong demand across categories and channels, but earnings declined 6.6 percent year-over-year due to supply chain constraints and inflation.

Despite this, earnings have exceeded consensus in each of the last seven quarters.

Estimated correction trend

The Zacks Consensus Estimate for Masco's fourth-quarter earnings is 71 cents per share, which implies a 5.3% decline from the 75 cents reported in the year-ago quarter. Earnings estimates for the aforementioned period have moved north 1.4 percent over the past seven days, reflecting analysts' optimism about the company's growth potential. The general estimate for net sales is $1.98 billion, up 6.2 percent from a year ago.

Factors to be aware of

Masco's revenues are likely to reflect strong performance in the Decorative Building Products and Plumbing Products segments in the fourth quarter. Geographically, North America and international markets have been dependent on strong demand from the real estate industry, which has benefited the company.

The business has been highly focused on housing, repair and remodeling activities. With a solid economic outlook, demand for housing and building material products remains strong given the trend of increased consumer investment in homes during the pandemic.

It has been augmenting its existing portfolio with regular acquisitions, which may enable the company to make operational improvements.

DIY demand is likely to remain stable in the fourth quarter of 2021. In addition, strong inflationary pressures could hurt margins, particularly in commodities and logistics. The industry as a whole has been experiencing supply chain constraints and inflation in materials, transportation and labor, which have been driving up costs. Although cost price neutrality is expected to be achieved in the fourth quarter, inflation may have peaked (around the mid-teens).

The company expects that the additional SG&A increase will have a significant impact on Plumbing's operating margins in the fourth quarter. In addition to raw material costs, it has been incurring expenses related to product launches.

The Zacks Consensus Estimate for pipeline product sales was $1.265 billion, indicating a 7.9 percent increase over the year-ago reported figure. Non-GAAP operating profit was also $190 million, a 15.2 percent decline from the figure reported in the prior year.

The consensus mark for sales in the Decorative Building Products segment is now $717 million, up 4.2 percent from the figure reported a year ago. Non-GAAP operating profit was also $108 million, down from $109 million a year ago.

What the Zacks Model Reveals

Our proven model predicts that Masco will beat earnings this time around. A combination of Positive and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can find the best stocks to buy or sell ahead of our report

Currently, MAS has the second highest Zacks rank with a gain of +6.13% ESP.

You can see.

Other portfolio-friendly individual stocks

Here are some other companies in the Zacks Construction industry that have the right mix of elements to report profitability in their respective quarters, according to our model.

Boise Cascade Company (BCC Quick Quote – ) has a gain ESP of +9.09% and a Zacks Rank #1.

Boise Cascade's stock price has risen 63% over the past year. BCC's earnings have exceeded consensus for the past four quarters, averaging 45.5%.

Louisiana-Pacific Corp. (LPX Quick Quote – ) has a gain ESP of +1.08% and a Zacks Rank #1.

Louisiana-Pacific's stock price has risen 69.8% over the past year. LPX's earnings have exceeded consensus for the past four quarters, averaging 10.5%.

Martin Marietta Materials, Inc. (MLM Quick Quote – ) has a gain ESP of +1.40% and a Zacks Rank #3.

MLM's stock price has risen 31.1% over the past year. MLM has exceeded consensus earnings twice in the last four quarters, but missed expectations in the other two, with an average surprise rate of 33.4%.

Stay informed of upcoming earnings announcements.