The Q1 earnings season has so far seen releases from 69.2% of the construction companies in the S&P 500 cohort. Per the latest Earnings Trends report, 88.9% of the companies posted an earnings beat, while 66.7% surpassed revenue estimates. Total earnings of these construction companies increased 11.7% on 8.3% revenue growth.

Construction activity had gathered steam in 2016. Positives such as an improving economy, modest wage growth, low unemployment levels and positive consumer confidence raise optimism about the sector’s performance in 2017. As such, demand for companies’ products should also increase, thereby driving revenues.

United Rentals Inc. URI exhibited an impressive performance in the first quarter of 2017, with earnings and revenues beating the Zacks Consensus Estimate by 3.2% and 1.5%, respectively.

Masco Corporation’s MAS reported first-quarter 2017 adjusted earnings of 41 cents per share, surpassing the consensus mark by 17.1%. Adjusted earnings increased 28.1% year over year. Masco also posted net sales of $1.78 billion, beating the Zacks Consensus Estimate of $1.75 billion by 1.7%.

Let’s take a look at how the following construction companies are placed ahead of their first-quarter 2017 earnings releases on May 5.

Louisiana-Pacific Corporation LPX, manufacturer of building materials and engineered wood products in the U.S., Canada, Chile and Brazil, will report after market close.

Last quarter, Louisiana-Pacific posted a positive surprise of 21.05%. The company surpassed estimates in three of the last four quarters and has an average positive earnings surprise of 66.28%. Estimates for the current quarter went up 10.7% over the last 30 days.

Our model suggests that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. In this case, our proven model shows that Louisiana-Pacific is likely to beat earnings because it has the perfect combination of an Earnings ESP of +9.68% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Louisiana-Pacific Corporation Price and EPS Surprise

Louisiana-Pacific Corporation Price and EPS Surprise | Louisiana-Pacific Corporation Quote

The Zacks Consensus Estimate for the quarter’s earnings is pegged at 31 cents, up 338.1% year over year. The consensus for revenues is at pegged $578.01 million, implying 14.5% year-over-year growth.

Installed Building Products, Inc. IBP, the nation's second largest insulation installer for the residential new construction market and a diversified installer of complementary building products, will report before market opens.

Last quarter, the company posted a negative surprise of 12.5%. The company missed estimates in three of the last four quarters but has an average positive earnings surprise of 6.86%, owing to a stellar first quarter of 2016. Estimates for the current quarter remained stable over the last 30 days.

Currently, the company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 26 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Though Installed Building’s Zacks Rank #3 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings beat.

Installed Building Products, Inc. Price and EPS Surprise

Installed Building Products, Inc. Price and EPS Surprise | Installed Building Products, Inc. Quote

The Zacks Consensus Estimate for the quarter’s earnings is pegged at 26 cents, up 32.5% year over year. The consensus for revenues is at $236.3 million, implying 23.3% year-over-year growth.

Gibraltar Industries, Inc. ROCK, a leading manufacturer and distributor of building products for industrial, infrastructure, residential, and renewable energy and conservation markets, will report before market opens.

Last quarter, the company posted a positive surprise of 20%. The company surpassed estimates in all of the last four quarters with an average positive earnings surprise of 41.5%. Estimates for the current quarter remained steady over the last 30 days.

Gibraltar is unlikely to beat as it has a Zacks Rank #3 and an Earnings ESP of -5.00% (Most Accurate estimate is 19 cents and Zacks Consensus Estimate is 20 cents).

Gibraltar Industries, Inc. Price and EPS Surprise

Gibraltar Industries, Inc. Price and EPS Surprise | Gibraltar Industries, Inc. Quote

The Zacks Consensus Estimate for the quarter’s earnings is pegged at 20 cents, down 16.7% year over year. The consensus for revenues is pegged at $213.17 million, implying 8.8% year-over-year growth.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Masco Corporation (MAS): Free Stock Analysis Report
 
United Rentals, Inc. (URI): Free Stock Analysis Report
 
Installed Building Products, Inc. (IBP): Free Stock Analysis Report
 
Louisiana-Pacific Corporation (LPX): Free Stock Analysis Report
 
Gibraltar Industries, Inc. (ROCK): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research