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Industrial Stocks' Q2 Earnings to Watch on Jul 26: MMM, UTX
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The Q2 earnings season is gaining momentum with 189 companies on the S&P 500 index reporting this week. Although it is too early to predict any clear pattern, the 126 companies that have reported results till Friday (Jul 22), more or less confirm the grim earnings projections for the quarter. Based on the hitherto declared results, Q2 is widely expected to be the fifth consecutive quarter to report an earnings decline for the benchmark index.
Plagued by a plethora of macroeconomic issues and continued volatility in the equity market, Q2 earnings estimates for the S&P 500 index have hovered in the negative territory, improving slightly from the last quarter. Per the latest Earnings Trend Report, overall Q2 earnings for the S&P 500 companies are expected to be down 3.4% on a 0.5% decline in revenues. The relative improvement in negative estimate revisions for the quarter is largely due to a turnaround in oil prices and fading effects of the dollar strength. The S&P 500 has also witnessed a dramatic reversal in its fortunes when it shrugged off about 5.3% drop in just two trading sessions (on the Brexit referendum) to record over 2% return for the quarter.
However, the overall Q2 earnings scenario still remains clouded with uncertainty. What is more alarming is that the likely dismal earnings performance is not attributable to the inherent weakness of the Energy sector alone. Rather, downward estimate revisions are expected in almost all the sectors, barring a few. About 9 of the 16 sectors are expected to witness an earnings decline in the quarter under review, with Oil/Energy, Basic Materials, Transportation and Industrial Products being the most notable.
Among the Industrial stocks slated to report this week, let’s have a sneak peek at two major industry players to see how things are gearing up for the upcoming quarterly results.
3M Company (MMM - Free Report) is scheduled to report second-quarter 2016 earnings before the opening bell tomorrow. Over the years, 3M has initiated some prudent steps to strengthen and focus on its core portfolio of businesses. Since 2012, the company has pruned its businesses from 40 to 26, thereby improving customer relevance, productivity and speed through a leaner operating structure. At the same time, 3M has maintained a steady investment in R&D to develop innovative products. The company expects to invest $1.8 billion in R&D in 2016 for higher organic growth and complement it through strategic acquisitions. It believes that these efforts will result in significant annual operational savings and reduction in working capital. For the impending quarter, this Zacks Rank #3 (Hold) stock has an Earnings ESP of -0.48%, making surprise prediction uncertain. (Read more: What's in the Cards for 3M Company in Q2 Earnings?)
United Technologies Corporation will report second-quarter 2016 results before the opening bell tomorrow as well. During the quarter, United Technologies continued with its strategic initiatives to trim operating costs and restructure its portfolio to focus on the core businesses. These included an overhaul of its organizational structure in the aerospace business along with some key changes in leadership positions. United Technologies believes that the streamlined organizational setup would enable it to better serve its customers. For the impending quarter, this Zacks Rank #3 stock has an Earnings ESP of +1.21%, making us confident of a positive earnings surprise. (Read more: United Technologies: Are Q2 Earnings Set for a Beat?)
Stay tuned! Check later on our full write-up on earnings releases of these stocks.
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Industrial Stocks' Q2 Earnings to Watch on Jul 26: MMM, UTX
The Q2 earnings season is gaining momentum with 189 companies on the S&P 500 index reporting this week. Although it is too early to predict any clear pattern, the 126 companies that have reported results till Friday (Jul 22), more or less confirm the grim earnings projections for the quarter. Based on the hitherto declared results, Q2 is widely expected to be the fifth consecutive quarter to report an earnings decline for the benchmark index.
Plagued by a plethora of macroeconomic issues and continued volatility in the equity market, Q2 earnings estimates for the S&P 500 index have hovered in the negative territory, improving slightly from the last quarter. Per the latest Earnings Trend Report, overall Q2 earnings for the S&P 500 companies are expected to be down 3.4% on a 0.5% decline in revenues. The relative improvement in negative estimate revisions for the quarter is largely due to a turnaround in oil prices and fading effects of the dollar strength. The S&P 500 has also witnessed a dramatic reversal in its fortunes when it shrugged off about 5.3% drop in just two trading sessions (on the Brexit referendum) to record over 2% return for the quarter.
However, the overall Q2 earnings scenario still remains clouded with uncertainty. What is more alarming is that the likely dismal earnings performance is not attributable to the inherent weakness of the Energy sector alone. Rather, downward estimate revisions are expected in almost all the sectors, barring a few. About 9 of the 16 sectors are expected to witness an earnings decline in the quarter under review, with Oil/Energy, Basic Materials, Transportation and Industrial Products being the most notable.
Among the Industrial stocks slated to report this week, let’s have a sneak peek at two major industry players to see how things are gearing up for the upcoming quarterly results.
3M Company (MMM - Free Report) is scheduled to report second-quarter 2016 earnings before the opening bell tomorrow. Over the years, 3M has initiated some prudent steps to strengthen and focus on its core portfolio of businesses. Since 2012, the company has pruned its businesses from 40 to 26, thereby improving customer relevance, productivity and speed through a leaner operating structure. At the same time, 3M has maintained a steady investment in R&D to develop innovative products. The company expects to invest $1.8 billion in R&D in 2016 for higher organic growth and complement it through strategic acquisitions. It believes that these efforts will result in significant annual operational savings and reduction in working capital. For the impending quarter, this Zacks Rank #3 (Hold) stock has an Earnings ESP of -0.48%, making surprise prediction uncertain. (Read more: What's in the Cards for 3M Company in Q2 Earnings?)
3M CO Price and EPS Surprise
3M CO Price and EPS Surprise | 3M CO Quote
United Technologies Corporation will report second-quarter 2016 results before the opening bell tomorrow as well. During the quarter, United Technologies continued with its strategic initiatives to trim operating costs and restructure its portfolio to focus on the core businesses. These included an overhaul of its organizational structure in the aerospace business along with some key changes in leadership positions. United Technologies believes that the streamlined organizational setup would enable it to better serve its customers. For the impending quarter, this Zacks Rank #3 stock has an Earnings ESP of +1.21%, making us confident of a positive earnings surprise. (Read more: United Technologies: Are Q2 Earnings Set for a Beat?)
UTX TECHS CORP Price and EPS Surprise
UTX TECHS CORP Price and EPS Surprise | UTD TECHS CORP Quote
Stay tuned! Check later on our full write-up on earnings releases of these stocks.
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 >>