D.A. Davidson Previews Matrix Service's Q4 Earnings

D.A. Davidson expects Matrix Service Co MTRX to report Q4 earnings below consensus on commodity market pressure.

Matrix Service, a provider of engineering, fabrication, infrastructure, construction and maintenance services, is set to report its Q4 numbers on August 30 after the market close.

The brokerage projects fourth quarter GAAP EPS of $0.27, below consensus estimate of $0.31 and last year's reported GAAP figure $0.40. The company recently guided to FY16 EPS of $1.00-$1.10 with revenue of $1.275-$1.325 billion, implying fourth quarter EPS of $0.27-$0.37 and revenue of $323-$373 million versus $370 million in the prior year.

"Operating results are expected to reflect difficult market conditions for construction firms in the second calendar quarter of 2016," analyst John Rogers wrote in a note.

Despite market pressures on oil/gas and industrial facility project work, the analyst noted that the company should benefit from recent expansion and better execution of electrical power projects as well as initial work on oil storage construction for a new pipeline project.

Rogers sees revenue growth of 18 percent in Electrical Infrastructure and 13 percent in Storage Solutions.

Meanwhile, Rogers projects EPS of $1.25 in FY17 compared to consensus of $1.33, and expects management to provide initial prospects for FY17 including comments on recent work activity.

Rogers has a Buy rating and price target of $20, implying a potential return of 19 percent over Thursday's close of $16.74.