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Is a Disappointment in Store for Eaton (ETN) in Q2 Earnings?
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Eaton Corporation (ETN - Free Report) will release second-quarter 2016 financial results before the market opens on Aug 2. Last quarter, this power management company reported a positive earnings surprise of 3.53%. Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Eaton expects earnings per share for the second quarter to be in the range of $1 to $1.10 per share. Eaton expects its organic revenue to improve in excess of 5% sequentially, as the first quarter is historically its weakest in terms of revenue generation.
However, the weakness in the some of the company’s end markets could have an adverse impact on its results on a year-over-year basis. Negative currency translation might also have some impact on second-quarter revenues. Eaton expects organic revenues to decline between 2% and 4%, reflecting continuing sluggish markets around the world.
Our proven model does not conclusively show that Eaton Corporation is likely to beat estimates 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 this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Most Accurate estimate stands at $1.05 while the Zacks Consensus Estimate is pegged higher at $1.06, resulting in an Earnings ESP of -0.94%.
Zacks Rank: Eaton carries a Zacks Rank #4 (Sell). As it is, 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 negative estimate revisions.
Stocks to Consider
Instead, here are a few players in the industrial product sector that have the right combination of elements to post an earnings beat this quarter.
Harsco Corp. has an Earnings ESP of +38.46% and a Zacks Rank #1. It is expected to report second-quarter earnings on Aug 4.
Ball Corp. has an Earnings ESP of +1.01% and a Zacks Rank #3. It is slated to report second-quarter earnings on Aug 4.
Deere & Co. (DE - Free Report) has an Earnings ESP of +9.47% and a Zacks Rank #3. It is slated to report third-quarter fiscal 2016 earnings on Aug 19.
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Is a Disappointment in Store for Eaton (ETN) in Q2 Earnings?
Eaton Corporation (ETN - Free Report) will release second-quarter 2016 financial results before the market opens on Aug 2. Last quarter, this power management company reported a positive earnings surprise of 3.53%. Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Eaton expects earnings per share for the second quarter to be in the range of $1 to $1.10 per share. Eaton expects its organic revenue to improve in excess of 5% sequentially, as the first quarter is historically its weakest in terms of revenue generation.
However, the weakness in the some of the company’s end markets could have an adverse impact on its results on a year-over-year basis. Negative currency translation might also have some impact on second-quarter revenues. Eaton expects organic revenues to decline between 2% and 4%, reflecting continuing sluggish markets around the world.
EATON CORP PLC Price and EPS Surprise
EATON CORP PLC Price and EPS Surprise | EATON CORP PLC Quote
Earnings Whispers
Our proven model does not conclusively show that Eaton Corporation is likely to beat estimates 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 this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Most Accurate estimate stands at $1.05 while the Zacks Consensus Estimate is pegged higher at $1.06, resulting in an Earnings ESP of -0.94%.
Zacks Rank: Eaton carries a Zacks Rank #4 (Sell). As it is, 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 negative estimate revisions.
Stocks to Consider
Instead, here are a few players in the industrial product sector that have the right combination of elements to post an earnings beat this quarter.
Harsco Corp. has an Earnings ESP of +38.46% and a Zacks Rank #1. It is expected to report second-quarter earnings on Aug 4.
Ball Corp. has an Earnings ESP of +1.01% and a Zacks Rank #3. It is slated to report second-quarter earnings on Aug 4.
Deere & Co. (DE - Free Report) has an Earnings ESP of +9.47% and a Zacks Rank #3. It is slated to report third-quarter fiscal 2016 earnings on Aug 19.
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 >>