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Stanley Black & Decker (SWK) Q2 Earnings: What's in Store?
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Industrial tool maker Stanley Black & Decker, Inc. (SWK - Free Report) is geared up to report second-quarter 2016 results on Jul 22, before the market opens. The Zacks Consensus Estimate for the quarter is pegged at $1.71.
In the four trailing quarters, Stanley Black & Decker reported better-than-expected results in three and in-line result in one. Average earnings surprise was a positive 4.54%. In the last reported quarter, the company’s earnings surprise was a positive 10.92% as its earnings of $1.32 per share surpassed the Zacks Consensus Estimate of $1.19. Let us see how things are shaping up for this quarter.
Factors to Affect Q2 Results
Stanley Black & Decker’s segmental performances and its overall profitability are largely influenced by industrial activities and the housing markets of the U.S. as well as economic activities of the foreign countries served. In the Apr-Jun quarter, industrial production in the U.S. declined roughly 1% year over year. Housing starts in the quarter were mixed, with month-over-month gains of roughly 3.8% for Apr and 4.8% for Jun, partially offset by 1.7% decline in May.
Also, we believe that economic uncertainties in some developed and emerging nations, soft energy market and forex woes played spoilsport for industries like Industrial Products in second-quarter 2016. However, the impact of such headwinds is subdued compared with the first-quarter. In addition to these macro headwinds, Stanley Black & Decker is exposed to risks arising from increasing expenses, huge debt level and active competition.
Despite such setbacks, we believe a diversified product portfolio, a vast clientele, inorganic growth initiatives and capital allocation policy might have positively impacted Stanley Black & Decker’s financial performance in the quarter. Also, the company expects to benefit from lower share count, improved productivity and cost actions.
Earnings Whispers
Our proven model does not conclusively show that Stanley Black & Decker will be able to pull a surprise 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 an earnings beat. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for Stanley Black & Decker is currently -0.59%. This is because the Most Accurate estimate of $1.70 per share stands below the Zacks Consensus Estimate of $1.71.
Zacks Rank: Stanley Black & Decker’s Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies in the machinery industry you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Hubbell Inc. (HUBB - Free Report) , with an Earnings ESP of +0.70% and a Zacks Rank #2.
Ingersoll-Rand Plc (IR - Free Report) , with an Earnings ESP of +0.77% and a Zacks Rank #2.
Caterpillar Inc. (CAT - Free Report) , with an Earnings ESP of +2.08% and a Zacks Rank #3.
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 >>
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Stanley Black & Decker (SWK) Q2 Earnings: What's in Store?
Industrial tool maker Stanley Black & Decker, Inc. (SWK - Free Report) is geared up to report second-quarter 2016 results on Jul 22, before the market opens. The Zacks Consensus Estimate for the quarter is pegged at $1.71.
In the four trailing quarters, Stanley Black & Decker reported better-than-expected results in three and in-line result in one. Average earnings surprise was a positive 4.54%. In the last reported quarter, the company’s earnings surprise was a positive 10.92% as its earnings of $1.32 per share surpassed the Zacks Consensus Estimate of $1.19. Let us see how things are shaping up for this quarter.
Factors to Affect Q2 Results
Stanley Black & Decker’s segmental performances and its overall profitability are largely influenced by industrial activities and the housing markets of the U.S. as well as economic activities of the foreign countries served. In the Apr-Jun quarter, industrial production in the U.S. declined roughly 1% year over year. Housing starts in the quarter were mixed, with month-over-month gains of roughly 3.8% for Apr and 4.8% for Jun, partially offset by 1.7% decline in May.
Also, we believe that economic uncertainties in some developed and emerging nations, soft energy market and forex woes played spoilsport for industries like Industrial Products in second-quarter 2016. However, the impact of such headwinds is subdued compared with the first-quarter. In addition to these macro headwinds, Stanley Black & Decker is exposed to risks arising from increasing expenses, huge debt level and active competition.
Despite such setbacks, we believe a diversified product portfolio, a vast clientele, inorganic growth initiatives and capital allocation policy might have positively impacted Stanley Black & Decker’s financial performance in the quarter. Also, the company expects to benefit from lower share count, improved productivity and cost actions.
Earnings Whispers
Our proven model does not conclusively show that Stanley Black & Decker will be able to pull a surprise 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 an earnings beat. That is not the case here as you will see below.
Zacks ESP: Earnings ESP for Stanley Black & Decker is currently -0.59%. This is because the Most Accurate estimate of $1.70 per share stands below the Zacks Consensus Estimate of $1.71.
STANLEY B&D INC Price and EPS Surprise
STANLEY B&D INC Price and EPS Surprise | STANLEY B&D INC Quote
Zacks Rank: Stanley Black & Decker’s Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies in the machinery industry you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Hubbell Inc. (HUBB - Free Report) , with an Earnings ESP of +0.70% and a Zacks Rank #2.
Ingersoll-Rand Plc (IR - Free Report) , with an Earnings ESP of +0.77% and a Zacks Rank #2.
Caterpillar Inc. (CAT - Free Report) , with an Earnings ESP of +2.08% and a Zacks Rank #3.
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 >>