Proto Labs (PRLB) to Report Q1 Earnings: What to Expect?

Proto Labs, Inc. PRLB is scheduled to report first-quarter 2016 results on Apr 28, before the market opens. The Zacks Consensus Estimate for the quarter is pegged at 42 cents.

In the trailing four quarters, Proto Labs reported better-than-expected results in two, while underperforming in the rest with an average beat of 1.20%.

Last quarter, the company's earnings of 45 cents per share surpassed the Zacks Consensus Estimate of 43 cents by 4.65%. Let's see how things are shaping up for Proto Labs this quarter.

Factors to Influence Q1 Results

Though macro headwinds have eased a bit, we believe that industrial products stocks, like Proto Labs, are still affected by them. Talking of the industrial production in the U.S., an annual fall of 2.2% was recorded in first-quarter 2016. Also, unfavorable foreign currency movements and weak economic conditions in some developed and developing nations were major concerns.

We believe the prevalent economic uncertainties in the quarter might have impacted the demand for Proto Labs' custom parts used for prototyping and in short-run production. Also, stiff competition from other prototype manufacturers was a concerning factor in the quarter.

Notwithstanding these adversities in the near-term, Proto Labs' efficient management and marketing team as well as its efforts for researching and developing new and improved products will prove beneficial, going forward. Also, various organic and inorganic initiatives are expected to enhance the company's revenue-generation capabilities in the quarters ahead.

Earnings Whispers

Our proven model does not conclusively show that Proto Labs is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP of Proto Labs is currently 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 42 cents.

Zacks Rank: Proto Labs currently carries a Zacks Rank #3. This rank, when combined with a zero ESP, makes surprise predictions difficult.

Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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

Regal Beloit Corp. RBC, with an Earnings ESP of +0.92% and a Zacks Rank #2.

Emerson Electric Co. EMR, with an Earnings ESP of +3.18% and a Zacks Rank #2.

SPX FLOW, Inc. FLOW, with an Earnings ESP of +100% and a Zacks Rank #2.

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