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Industrial Stocks Earnings Preview: IR, ROK, WIRE, SLGN, OI
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In the Industrial Products sector, 23.8% of the companies have so far reported their second-quarter numbers, putting up 3% earnings growth on the scoreboard. However, it is too early to be optimistic on this sector. Based on our projections for the quarter, growth will be in negative territory for 9 of the 16 Zacks sectors, which also includes the Industrial Products sector. Industrial Products is expected to record an earnings decline of 8% in the quarter. However, compared to the unceremonious 22.2% plunge in earnings suffered by the sector in first-quarter 2016, it should count as a major improvement.
We are staring at negative earnings projections for the fifth consecutive quarter for the overall S&P 500 index, with total earnings expected to be down 3.4% on 0.5% lower revenues.
Industrial production increased 0.6% in June, after declining 0.3% in May. In the second quarter, industrial production suffered its third consecutive quarterly decline, falling at an annual rate of 1%. Industrial demand remained challenged in the quarter, hurt by the weak global oil & gas markets. Capacity utilization is seen to be decreasing, reflecting slow industrial capex spending. On the positive side, market conditions were favorable in U.S. construction.
The International Monetary Fund has reduced its 2016 growth projections by 20 basis points (bps) to 2.6% for the U.S. economy. As per the organization, overall activity remains strong in the U.S., supported by still-easy financial conditions and strengthening housing and labor markets. However, a stronger dollar and weaker oil prices continue to weigh on manufacturing activities, curtailing investment in mining structures and equipment.
With a plethora of companies releasing results this week, let’s see how it unfolds for these five industrial players that are going to report their numbers tomorrow.
Ingersoll-Rand Plc (IR - Free Report) will release second-quarter 2016 financial results before the market opens on Jul 27.
In the prior quarter, this industrial goods manufacturer reported a positive earnings surprise of 35.14%. The company has a fairly decent earnings surprise history, beating earnings estimates thrice in the past four quarters with an average positive earnings surprise of 9.52%.
Ingersoll is striving to achieve steady improvement in operating profitability through investment in new products, expenditure on its IT platform and establishing its channel services footprint and product management capabilities. We expect Ingersoll-Rand to come up with a positive earnings surprise this season backed by its Zacks Rank #2 (Buy) and Earnings ESP of +0.77% (read more: Will Ingersoll-Rand Surpass Q2 Earnings Estimates?).
Rockwell Automation, Inc. (ROK - Free Report) will report third-quarter fiscal 2017 results on Jul 27, before the market opens. In the last-reported quarter, the company posted a positive earnings surprise of 3.79%. Notably, Rockwell Automation has delivered a positive earnings surprise of 1.61% on an average over the last four quarters.
Despite the weakening oil and gas vertical and fragile heavy industries, Rockwell Automation will benefit from growth in the consumer, life sciences and auto verticals and restructuring actions. The company’s Zacks Rank #3 (Hold) and Earnings ESP of -1.37% make a beat unlikely this quarter (read more: Rockwell Automation Q3 Earnings: What's in Store?).
Encore Wire, Corp. (WIRE - Free Report) , the manufacturer of electrical building wire and cable products for interior electrical wiring, will report second-quarter results on Jul 27, 2016.
In the prior quarter, the company reported a negative earnings surprise of 14.58%. It has a mixed earnings surprise history, beating earnings estimates twice in the past four quarters with an average positive earnings surprise of 9.49%.
The company continues to strive to lead and support industry price increases in an effort to maintain and improve margins. Its superior order fill rates continue to enhance its competitive position. Encore Wire has an earnings ESP of 0.00% and a Zacks Rank #3 (Hold). This makes surprise prediction difficult.
Silgan Holdings, Inc. (SLGN - Free Report) manufactures and sells rigid packaging for shelf-stable food and other consumer goods products worldwide and will report second-quarter results on Jul 27, 2016.
It beat the Zacks Consensus Estimate last quarter, with an average positive earnings surprise of 12.5%. The company has a decent earnings surprise history, beating the Zacks Consensus Estimate in three of the last four quarters, averaging 5.41%.
Incremental costs from its footprint optimization programs, high debt and foreign exchange volatility remain concerns. However, strategic acquisitions, footprint optimization programs across each of its businesses and continued momentum in the Closure business bode well. The company has a Zacks Rank #4 (Sell) and an earnings ESP of 0.00%, which makes a beat unlikely this quarter.
Manufacturer of glass containers, Owens-Illinois, Inc. (OI - Free Report) is scheduled to report second-quarter 2016 results on Jul 27, after the closing bell.
Owens-Illinois has outpaced the Zacks consensus estimate in three of the trailing four quarters, with an average earnings beat of 6.77%. In the last-reported quarter, the company posted a positive earnings surprise of 20.00%.
In the second quarter, Owens-Illinois expects to see less adverse effects from hedging program and benefit from its joint venture with Constellation Brands, which will soon be ramping up its second furnace. However weakness in Brazil remains a concern.
The company has an earnings ESP of 0.00% and a Zacks Rank #4 (Sell) (read more: OI Quick QuoteOI - Free Report) %20Q2%20Earnings:%20Will%20the%20Stock%20Disappoint?">OOI Quick QuoteOI - Free Report) %20Q2%20Earnings:%20Will%20the%20Stock%20Disappoint?">wens-Illinois Q2 Earnings: Will the Stock Disappoint?).
Keep an eye on our full earnings articles to see how these companies finally fared.
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Industrial Stocks Earnings Preview: IR, ROK, WIRE, SLGN, OI
In the Industrial Products sector, 23.8% of the companies have so far reported their second-quarter numbers, putting up 3% earnings growth on the scoreboard. However, it is too early to be optimistic on this sector. Based on our projections for the quarter, growth will be in negative territory for 9 of the 16 Zacks sectors, which also includes the Industrial Products sector. Industrial Products is expected to record an earnings decline of 8% in the quarter. However, compared to the unceremonious 22.2% plunge in earnings suffered by the sector in first-quarter 2016, it should count as a major improvement.
We are staring at negative earnings projections for the fifth consecutive quarter for the overall S&P 500 index, with total earnings expected to be down 3.4% on 0.5% lower revenues.
Industrial production increased 0.6% in June, after declining 0.3% in May. In the second quarter, industrial production suffered its third consecutive quarterly decline, falling at an annual rate of 1%. Industrial demand remained challenged in the quarter, hurt by the weak global oil & gas markets. Capacity utilization is seen to be decreasing, reflecting slow industrial capex spending. On the positive side, market conditions were favorable in U.S. construction.
The International Monetary Fund has reduced its 2016 growth projections by 20 basis points (bps) to 2.6% for the U.S. economy. As per the organization, overall activity remains strong in the U.S., supported by still-easy financial conditions and strengthening housing and labor markets. However, a stronger dollar and weaker oil prices continue to weigh on manufacturing activities, curtailing investment in mining structures and equipment.
With a plethora of companies releasing results this week, let’s see how it unfolds for these five industrial players that are going to report their numbers tomorrow.
Ingersoll-Rand Plc (IR - Free Report) will release second-quarter 2016 financial results before the market opens on Jul 27.
In the prior quarter, this industrial goods manufacturer reported a positive earnings surprise of 35.14%. The company has a fairly decent earnings surprise history, beating earnings estimates thrice in the past four quarters with an average positive earnings surprise of 9.52%.
INGERSOLL RAND Price and EPS Surprise
INGERSOLL RAND Price and EPS Surprise | INGERSOLL RAND Quote
Ingersoll is striving to achieve steady improvement in operating profitability through investment in new products, expenditure on its IT platform and establishing its channel services footprint and product management capabilities. We expect Ingersoll-Rand to come up with a positive earnings surprise this season backed by its Zacks Rank #2 (Buy) and Earnings ESP of +0.77% (read more: Will Ingersoll-Rand Surpass Q2 Earnings Estimates?).
Rockwell Automation, Inc. (ROK - Free Report) will report third-quarter fiscal 2017 results on Jul 27, before the market opens. In the last-reported quarter, the company posted a positive earnings surprise of 3.79%. Notably, Rockwell Automation has delivered a positive earnings surprise of 1.61% on an average over the last four quarters.
ROCKWELL AUTOMT Price and EPS Surprise
ROCKWELL AUTOMT Price and EPS Surprise | ROCKWELL AUTOMT Quote
Despite the weakening oil and gas vertical and fragile heavy industries, Rockwell Automation will benefit from growth in the consumer, life sciences and auto verticals and restructuring actions. The company’s Zacks Rank #3 (Hold) and Earnings ESP of -1.37% make a beat unlikely this quarter (read more: Rockwell Automation Q3 Earnings: What's in Store?).
Encore Wire, Corp. (WIRE - Free Report) , the manufacturer of electrical building wire and cable products for interior electrical wiring, will report second-quarter results on Jul 27, 2016.
In the prior quarter, the company reported a negative earnings surprise of 14.58%. It has a mixed earnings surprise history, beating earnings estimates twice in the past four quarters with an average positive earnings surprise of 9.49%.
ENCORE WIRE CP Price and EPS Surprise
ENCORE WIRE CP Price and EPS Surprise | ENCORE WIRE CP Quote
The company continues to strive to lead and support industry price increases in an effort to maintain and improve margins. Its superior order fill rates continue to enhance its competitive position. Encore Wire has an earnings ESP of 0.00% and a Zacks Rank #3 (Hold). This makes surprise prediction difficult.
Silgan Holdings, Inc. (SLGN - Free Report) manufactures and sells rigid packaging for shelf-stable food and other consumer goods products worldwide and will report second-quarter results on Jul 27, 2016.
It beat the Zacks Consensus Estimate last quarter, with an average positive earnings surprise of 12.5%. The company has a decent earnings surprise history, beating the Zacks Consensus Estimate in three of the last four quarters, averaging 5.41%.
SILGAN HOLDINGS Price and Consensus
SILGAN HOLDINGS Price and Consensus | SILGAN HOLDINGS Quote
Incremental costs from its footprint optimization programs, high debt and foreign exchange volatility remain concerns. However, strategic acquisitions, footprint optimization programs across each of its businesses and continued momentum in the Closure business bode well. The company has a Zacks Rank #4 (Sell) and an earnings ESP of 0.00%, which makes a beat unlikely this quarter.
Manufacturer of glass containers, Owens-Illinois, Inc. (OI - Free Report) is scheduled to report second-quarter 2016 results on Jul 27, after the closing bell.
Owens-Illinois has outpaced the Zacks consensus estimate in three of the trailing four quarters, with an average earnings beat of 6.77%. In the last-reported quarter, the company posted a positive earnings surprise of 20.00%.
OWENS-ILLINOIS Price and EPS Surprise
OWENS-ILLINOIS Price and EPS Surprise | OWENS-ILLINOIS Quote
In the second quarter, Owens-Illinois expects to see less adverse effects from hedging program and benefit from its joint venture with Constellation Brands, which will soon be ramping up its second furnace. However weakness in Brazil remains a concern.
The company has an earnings ESP of 0.00% and a Zacks Rank #4 (Sell) (read more: OI Quick QuoteOI - Free Report) %20Q2%20Earnings:%20Will%20the%20Stock%20Disappoint?">OOI Quick QuoteOI - Free Report) %20Q2%20Earnings:%20Will%20the%20Stock%20Disappoint?">wens-Illinois Q2 Earnings: Will the Stock Disappoint?).
Keep an eye on our full earnings articles to see how these companies finally fared.
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 >>