Is Luxfer Holdings (LXFR) Poised to Beat Earnings Estimates? - Analyst Blog

Machinery company, Luxfer Holdings plc LXFR is set to report fourth-quarter 2013 results on Mar 13, after the market closes. In the last quarter, it delivered 5.71% negative earnings surprise. Let's see how things are shaping up for this announcement.

Factors to Consider

In the third quarter, Luxfer reported adjusted earnings per American Depositary Share ADS of 33 cents, missing the Zacks Consensus Estimate of 35 cents by 5.7%. However, revenues increased 4.7% year over year to $119.9 million. The year-over-year rise mainly resulted from higher alternative fuel cylinders sales and an improved market for life-support cylinders in the U.S.

Luxfer Holdings expects the European markets to negatively impact fourth-quarter earnings. However, North American markets are expected to be strong. Additionally, the Gas Cylinder business is performing well and this trend is expected to continue in the quarters to come.

Earnings Whispers?

Our proven model does not conclusively show that Luxfer is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as we see below.

Zacks ESP:  The ESP for Luxfer is 0.00%.This is because the Most Accurate estimate stands at 37 cents flat with the Zacks Consensus Estimate.

Zacks Rank: Luxfer's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Barnes Group Inc. B, Earnings ESP of +1.89% and a Zacks Rank #3.

Parker-Hannifin Corporation PH, Earnings ESP of +4.14% and a Zacks Rank #3.

Astec Industries, Inc. ASTE, Earnings ESP of +1.79% and a Zacks Rank #3.