What's Coming For Actuant?

Shares of Actuant Corporation ATU are down on Tuesday afternoon, in anticipation of the announcement of the company’s third quarter financial results, scheduled for Wednesday morning, before the market opens.

As seen in the chart above, Actuant’s earnings respond to somewhat of a cycle: they peak in the third quarter each year, and then fall in the three that follow, before recuperating in the next third quarter.

Expectations point toward a year-over-year decline in earnings of approximately 15 percent from last year’s $0.63 per share on sales of $378.2 million. For the current quarter, management guided earnings of $0.54 per share on revenue of $320 million.

According to Estimize, the Street is more bearish and anticipates earnings of $0.53 per share on revenue of $324.47 million. It is, however, the crowd that is most bearish, as it projects earnings of $0.52 per share on revenue of $322.85 million.

The Peltz Issue

In a recent report, RBC Capital Markets analyst Deane Dray said that Nelson Peltz’s Trian Partners might be considering Actuant as a target for activist involvement.

The expert noted that the company’s stock trades at a remarkable sum-of-the-parts valuation discount and even if Peltz doesn't become involved, other activist peers could.