According to the Zacks Industry classification, the machinery industry is broadly grouped under Industrial Products, one of the 16 broad Zacks sectors. We believe that financial performance of U.S.-based machinery stocks are highly correlated to the economic conditions of the home-country as well as that of foreign countries it serves.
On a macro front, we believe that during the Apr–Jun ‘16 quarter these machinery stocks faced headwinds from unfavorable foreign currency movements and weak economic conditions in some developed and developing nations. However, the impacts of such adversities are believed to have ebbed compared with the previous quarter. Domestically, one of the leading economic indicators for the industrial stocks - industrial production - fell roughly 1% year over year in April–June quarter.
As of Jul 29, roughly 71.4% of industrial products stocks in the S&P 500 Group reported results for the April–June quarter, recording a 1.4% decline in earnings and 4.2% fall in revenue. Earnings in the quarter are predicted to decline 5.1%, while revenue will likely fall 5.8%.
What's in Store for 5 Machinery Stocks, ETN, EMR, ESE, IIVI and POWL?
Below we discuss briefly the expectations from the upcoming results (April–June quarter) for five machinery stocks:
Eaton Corporation plc ETN: This machinery company is slated to release its second-quarter 2016 results on Aug 2, before the market opens. In the four trailing quarters, the company reported better-than-expected results in three while recording in-line results in one. Average earnings surprise was a positive 3.16%.
Our proven model conclusively shows that Eaton Corporation will disappoint earnings this quarter as it currently carries a Zacks Rank #4 (Sell) and -1.87% Earnings ESP. For a possible earnings beat, the company should have the right combination of two key ingredients – a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold). Over the last 60 days, the Zacks Consensus Estimate for the stock remained unchanged at $1.07 per share. (For more please read: Is a Disappointment in Store for Eaton in Q2 Earnings?)
Emerson Electric Co. EMR: The machinery company is anticipated to release its third-quarter fiscal 2016 (ended Jun 2016) results on Aug 2, before the market opens. In the trailing four quarters, the company reported better-than-expected results in three quarters while lagging in one. Average earnings surprise was a positive 2.91%.
EMERSON ELEC CO Price and EPS Surprise
EMERSON ELEC CO Price and EPS Surprise | EMERSON ELEC CO Quote
Our proven model does not conclusively show that Emerson Electric will beat earnings this quarter because it currently carries a Zacks Rank #4 and a 0.00% Earnings ESP. The Zacks Consensus Estimate for the stock has decreased 1.2% to 84 cents per share for third-quarter fiscal 2016. (For more please read: Will Emerson EMR Let Down Investors in Q3 Earnings?)
ESCO Technologies Inc. ESE: This machinery company is slated to release its third-quarter fiscal 2016 (ended Jun 2016) results on Aug 2, after the market closes. In the four trailing quarters, the company reported better-than-expected results in two while lagging in one. Average earnings surprise was a positive 11.92%.
Our proven model does not conclusively show that ESCO Technologies will beat earnings this quarter because it currently carries a Zacks Rank #3 and a 0.00% Earnings ESP. The Zacks Consensus Estimate for the stock has remained stable at 45 cents per share for third-quarter fiscal 2016.
II-VI Incorporated IIVI: The machinery company is slated to release its fourth-quarter fiscal 2016 (ended Jun 2016) results on Aug 2, before the market opens. Over the four trailing quarters, the company reported better-than-expected results with a positive average earnings surprise of 18.78%.
Our proven model does not conclusively show that II-VI Incorporated will beat earnings this quarter because it currently carries a Zacks Rank #3 and a 0.00% Earnings ESP. The Zacks Consensus Estimate for the stock has remained stable at 24 cents per share for fourth-quarter fiscal 2016.
Powell Industries, Inc. POWL: This machinery company is slated to release its third-quarter fiscal 2016 (ended Jun 2016) results on Aug 2, after the market closes. In the four trailing quarters, the company reported better-than-expected results in two while lagging in the rest. Average earnings surprise was a positive 40.70%.
Our proven model does not conclusively show that Powell Industries will beat earnings this quarter because it currently carries a Zacks Rank #3 and a 0.00% Earnings ESP. The Zacks Consensus Estimate for the stock has remained stable at 15 cents per share for third-quarter fiscal 2016.
Stay tuned! Check back on our full write-up on earnings release of Eaton Corporation and Emerson Electric.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
ESCO TECH INC ESE: Free Stock Analysis Report
II-VI INCORP IIVI: Free Stock Analysis Report
EMERSON ELEC CO EMR: Free Stock Analysis Report
POWELL INDS POWL: Free Stock Analysis Report
EATON CORP PLC ETN: Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
