Sterling (STRL) Q3 earnings: what to expect

What happened

Sterling Infrastructure, a civil infrastructure construction company, will report earnings this Wednesday afternoon. Last quarter it reported revenues of $1.17 billion, up 90.1% year on year, and its full-year EBITDA and revenue guidance beat analysts' expectations.

Confirmed

Global impact / market context

Analysts expect Sterling's revenue to grow 72.8% this quarter, far above the 16% growth it posted a year earlier. That forecast puts pressure on the company, which has missed Wall Street revenue estimates several times over the past two years.

Analyst inference

Among construction and engineering peers, only Comfort Systems has reported so far, beating revenue estimates with 53.7% sales growth, yet its stock fell 10% on the results. That shows strong reported numbers alone may not lift a share price.

Analyst inference

What to watch

1. Sterling's quarterly revenue result against the 72.8% year-on-year growth analysts expect, and whether it breaks the company's pattern of missing Wall Street revenue estimates. Confirmed
2. Watch whether Sterling raises its full-year EBITDA and revenue guidance again, which means its forecast for profit and sales, after exceeding analysts' expectations last quarter. Proposed
3. Compare Sterling's sales growth with Comfort Systems' 53.7%, since a similarly strong result that still coincides with a falling stock would suggest investor positioning is cautious. Analyst inference

Evidence

• stockstory.org