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Quanex (NX) to Report Third Quarter Results: What’s in Store? – August 30, 2022

Quanex Building Products Corporation (NX Free Report) is expected to release third-quarter fiscal 2022 results on September 1, after the closing bell.

In the most recently reported quarter, the company’s earnings beat Zacks’ consensus estimate of 77.8% and rose 86% year-over-year. Net sales also topped the consensus mark of 12.2% and were up 19.4% year-over-year.

NX’s earnings have exceeded the consensus mark in six of the past seven quarters.

The tendency to revise estimates

For the quarter to report, the Zacks consensus estimate for earnings per share was flat at 62 cents for the past 60 days. The estimated figure indicates an increase of 47.6% compared to the level of the quarter of the previous year. The net sales consensus mark is set at $301.1 million, suggesting a 7.6% increase from the figure reported a year ago.

Key Factors to Note

Quanex’s revenue in the third fiscal quarter is expected to have improved, primarily due to solid demand for the company’s products and a pass-through pricing strategy. Additionally, the company’s strong business strategy and cost containment efforts likely drove growth in the reportable quarter.

Quanex, the manufacturer of window and cabinet components, experienced strong demand for its products, mainly supported by a strong North American residential residential market. The company likely saw revenue growth in the North American Fenestration, North American Cabinet Components and European Fenestration segments during the third quarter of the fiscal year.

Zacks’ consensus estimate for NA Fenestration sales is pegged at $164 million, indicating 10.8% year-over-year growth. The same for EU fenestration sales is currently pegged at $74 million, suggesting a 4.2% improvement over year-ago quarter levels. The NA Cabinet Components segment sales consensus mark is currently pegged at $65 million, suggesting 4.8% year-over-year growth.

However, heightened inflationary pressures on most of its key raw materials and labor remain strong headwinds for the company.

What the Zacks model reveals

Our proven model does not conclusively predict an earnings beat for Quanex this time around. This is because a stock must have both a positive earnings ESP and a Zacks rank of #1 (strong buy), 2 (buy), or 3 (hold) for this to happen. That’s not the case here.

ESP Earnings: The company has an ESP on earnings of 0.00%. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Zacks Rank: Currently, Otis carries a Zacks Rank #3. You can see the full list of today’s Zacks #1 Rank stocks here.

Actions to consider

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ROCK’s expected earnings growth rate for 2022 is 18.7%. The Zacks consensus estimate for current-year earnings has been flat for the past 60 days.

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PRIM’s earnings for 2022 are expected to increase by 18.4%. The Zacks consensus estimate for current-year earnings has improved 4% over the past 30 days.

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