Will Actuant Corporation (ATU) Post Upbeat Earnings in Q4? - Analyst Blog

Machinery company Actuant Corporation (ATU) is slated to report fourth-quarter fiscal 2014 (ended Aug 2014) results on Oct 2, before the market opens. The Zacks Consensus Estimate for the quarter is pegged at 52 cents per share.

Actuant Corporation reported better-than-expected results for the fiscal third quarter, with an earnings surprise of 1.6%. Let us see how things are shaping up and whether the company will be able to post upbeat results this quarter.

Factors to Influence Q4 Results

Actuant Corporation presents solid organic and inorganic growth prospects for the quarters ahead. In this respect, the acquisitions of Hayes in May 2014 and Viking SeaTech in Aug 2013 are worth mentioning. These assets contributed nearly 5% of total revenue in the third quarter. In addition, improvements in organic revenue growth are expected in both Energy and Engineered Solutions segments.

Also, Actuant Corporation's capital deployment policy reflects its strong cash position. Authorized share repurchase program will reduce outstanding shares, thus boosting the company's earnings per share.  

However, divestment of the recreational vehicle business will lower Actuant Corporation's revenue generation capacity by $30 million. Also, unfavorable segment sales mix, restructuring activities and weak end-market demand remain causes of concern.

Earnings Whispers?

Our proven model does not conclusively show that Actuant Corporation 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, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Actuant Corporation has an ESP of 0.00% for fourth-quarter fiscal 2014. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 52 cents.

Zacks Rank: Actuant Corporation currently has a Zacks Rank #3 (Hold). This rank, when combined with a 0.00% ESP, makes surprise predictions 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 companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Colfax Corporation (CFX), with Earnings ESP of +1.61% and a Zacks Rank #3.

Manitex International, Inc. (MNTX), with Earnings ESP of +13.33% and a Zacks Rank #3.

Parker-Hannifin Corporation (PH), with Earnings ESP of +1.19% and a Zacks Rank #3.