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Roper Technologies (ROP) Q2 Earnings: What's in Store?

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Roper Technologies, Inc. (ROP - Free Report) is set to report second-quarter 2016 results on Jul 25, before the market opens. Last quarter, it posted a positive earnings surprise of 2.74%. It has an average four-quarter positive earnings surprise of 1.70%. Let’s see how things are shaping up for this announcement.

Factors at Play

Roper has a strategic business model which when combined with a healthy product mix and robust M&A activity is likely to drive growth in the long run. Also, the asset-light business model helps the company to generate strong cash flow quickly. In the past few months, the company saw an increase in net orders, which will likely benefit second-quarter results.

However, the company's Energy and Industrial segments are being negatively impacted by the ongoing weakness in the oil and gas sector. In addition, a leveraged balance sheet also poses some concerns.

For the second quarter of 2016, Roper Technologies expects adjusted earnings per share in the range of $1.56 - $1.61.

Earnings Whispers

Our proven model does not conclusively show that Roper Technologies is likely to beat earnings this quarter. This 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: Roper Technologies has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.61.

Zacks Rank: Roper Technologies carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

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

ROPER INDS INC Price and EPS Surprise

ROPER INDS INC Price and EPS Surprise | ROPER INDS INC Quote

Stocks to Consider

Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:

Post Holdings Inc. (POST - Free Report) with an Earnings ESP of +12.77% and a Zacks Rank #1.

Louisiana-Pacific Corp. (LPX - Free Report) with an Earnings ESP of +4.0% and a Zacks Rank #1

Potlatch Corp. (PCH - Free Report) with an Earnings ESP of +42.86% and a Zacks Rank #2

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