Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

USG Corporation (USG) Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

USG Corporation (NYSE:USG)Let’s turn to USG Corporation (NYSE:USG). The drywall maker has benefited from recent improvement in the housing industry, but will the good times last? Let’s take an early look at what’s been happening with USG over the past quarter and what we’re likely to see in its quarterly report Wednesday.

Stats on USG Corporation (NYSE:USG)

Analyst EPS Estimate ($0.26)
Year-Ago EPS ($0.90)
Revenue Estimate $791 million
Change from Year-Ago Revenue 5.5%
Earnings Beats in Past 4 Quarters 1

Source: Yahoo Finance.

Can USG finally build up its stock?
Analysts have been far less enthusiastic about USG’s prospects than shareholders lately, with pros barely budging in their assessment for a quarterly loss for the company. Yet fiscal 2013 is a different matter, with analysts having pushed up earnings-per-share estimates by a nickel over the past three months. That still pales in comparison to the more than 20% gain in the stock since mid-November.

The housing industry is a key component of USG’s success in selling its gypsum wall-board and joint compound products. Hovnanian Enterprises, Inc. (NYSE:HOV) and PulteGroup, Inc. (NYSE:PHM) have both seen huge share-price gains in the past year as demand for housing finally starts to pick up, but with homebuilder stocks having already gotten bid up, smart investors have turned to secondary-effect companies like USG as investment plays.

The big question, though, is whether USG can keep up with the expectations built into its soaring stock price. Even with revenue gearing up to gain at a nearly 10% clip in 2013 and the company seen reversing its losses, a forward P/E above 50 is still very ambitious. By comparison, even rising construction aggregate stocks Martin Marietta Materials, Inc. (NYSE:MLM) trades at only a 30 forward multiple, although rival Vulcan Materials Company (NYSE:VMC) has similarly seen its stock price get ahead of its forward earnings estimates.

USG needs to confirm in its quarterly report that things in the housing industry are going as well as everyone seems to think. Any shortfall compared to expectations would likely be devastating for USG shareholders.

The article USG Earnings: An Early Look originally appeared on and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!