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.

Why Texas Industries, Inc. (TXI) Earnings Prospects Look Bleak

Page 1 of 2

Texas Industries, Inc. (NYSE:TXI) will release its latest quarterly report on Thursday, and investors are clearly nervous about the company’s prospects. With shares having corrected by about 15% from their recent highs, it’s unclear how the company will handle the rising interest rate environment that we’ve seen since the beginning of May.

Texas Industries, Inc. (NYSE:TXI)

Texas Industries is a producer of cement and construction aggregates, relying on strong activity in the building industry in order to find a market for its products. The recent recovery in the housing market had many investors excited about Texas Industries’ prospects, but if higher financing costs choke off an upturn in development, then the company could face some big challenges. Let’s take an early look at what’s been happening with Texas Industries over the past quarter and what we’re likely to see in its quarterly report.

Stats on Texas Industries

Analyst EPS Estimate $0.19
Change From Year-Ago EPS 138%
Revenue Estimate $198.65 million
Change From Year-Ago Revenue 14%
Earnings Beats in Past 4 Quarters 2

Source: Yahoo! Finance.

Can Texas Industries keep pushing earnings higher?
Analysts have had decidedly mixed views on Texas Industries, Inc. (NYSE:TXI) and its earnings outlook over the past few months, having cut their May-quarter estimates by $0.08 per share but boosting their call for the full 2014 fiscal year by $0.02 per share. The stock has done well, rising almost 13% since early April, even though it has given up larger gains in the past six weeks.

But the bearish scenario for Texas Industries that Motley Fool contributor Sean Williams described late last month could well play itself out. As he noted, concerns about the impact of a reduction in the Federal Reserve’s quantitative easing program would send mortgage rates higher, causing mortgage activity and commercial loan volumes to fall dramatically and thereby reducing construction activity and demand for Texas Industries’ products.

Indeed, we’ve already seen similar share-price behavior from the rest of the industry. Martin Marietta Materials, Inc. (NYSE:MLM) has dropped 10% in the past month, with weakness in the steel industry likely adding to the company’s woes since it produces dolomitic lime for steel production as well as the granite, limestone, sand, gravel, and other aggregates for road paving and residential and commercial construction. Mexican cement giant Cemex SAB de CV (ADR) (NYSE:CX) has suffered a double hit as slowdowns in emerging markets have continued while the much hoped for strength in the U.S. market has shown signs of cracking as well.

Page 1 of 2

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!