HC2 Holdings, Inc. HCHC is slated to report third-quarter 2020 results on Nov 9, after market close.

The company delivered better-than-expected results in three of the last four quarters and missed estimates in the other. It has a trailing four-quarter earnings surprise of 41.91%, on average. Notably, its reported earnings of 26 cents per share in the prior quarter surpassed the Zacks Consensus Estimate of loss of 39 cents by 166.67%.

In the past three months, shares of the company have declined 25.9% compared with the industry’s growth of 13.4%.



Let us delve deeper.

Key Factors & Estimates for Q3

HC2 Holdings’ products and services offerings, its exposure in multiple end markets and a solid customer base, are likely to have supported the company’s performance in the third quarter. Also, efforts to reduce debts and strengthen the balance sheet as well as focus on lowering corporate expenditures are other tailwinds that might have been conducive to its quarterly performance.

For the Energy segment, benefits from 20 fueling stations (acquired in 2019) and the Alternative Fuels Tax Credit aided HC2 Holdings’ performance in the second quarter. Benefits from this trend might have influenced the segment’s performance in the third quarter as well.

The Construction segment’s results might mirror the unfavorable impacts of project delays (due largely to adverse impacts of the pandemic) by customers and volatility in the oil & gas markets. However, the company’s cost-containment efforts are expected to have been a relief.

For the Life Sciences segment, enhanced distribution of R2 skin lighting products and devices, especially in the Asia Pacific countries, might have aided HC2 Holdings during the September-end quarter. For the Broadcasting segment, postponement in advertising actives might have adversely impacted revenues in the quarter.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $400 million, suggesting a 16% decline from the year-ago period and 6.1% growth from the last reported quarter.

The Zack Consensus Estimate for the company’s bottom line is pegged at loss of 35 cents per share. This estimate compares unfavourably with the loss per share of 16 cents reported in the year-ago quarter and earnings of 26 cents recorded in the previous quarter.

Earnings Whispers

Our proven model does not conclusively suggest an earnings beat for HC2 Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case with HC2 Holdings as is shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: HC2 Holdings has an Earnings ESP of 0.00%, with both the Most Accurate Estimate and the Zacks Consensus Estimate pegged at loss of 35 cents.

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