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Barnes (B) to Report Q3 Earnings: What's in the Cards?
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Machinery company Barnes Group Inc. (B - Free Report) is set to release third-quarter 2016 results on Oct 28, before the market opens. The Zacks Consensus Estimate is pegged at 67 cents per share.
Over the last four quarters, Barnes Group delivered better-than-expected results in one, lagged in two and posted in-line results in one. Average earnings surprise was a negative 1.37%. In the last quarter the company’s earnings of 63 cents per share exceeded the Zacks Consensus Estimate of 59 cents by 6.78%.
Let us see how things are shaping up for Barnes Group prior to this announcement.
Factors to Influence Q3 Results
We believe that Barnes Group’s diversified product portfolio and new business will primarily drive the third-quarter results. Also, the company’s inorganic ways of strengthening its business will allow it to offer better and innovative products to customers in various operating regions. During the quarter, the company acquired Adval Tech’s molds business which will compliment its molding solutions business by allowing easy penetration into the plastic injection molding market.
In addition, Barnes Group’s sound capital allocation policy of rewarding its shareholders through dividends and share buybacks will work in its favor. Despite such positives, the company’s growth momentum might get a setback from headwinds from regulatory issues in the aerospace business and stiff competition in the industry.
Also, being an international company, Barnes Group’s performance is largely influenced by prevalent uncertainties in some developed and developing nations. In July, the global economic growth forecast for 2016 was lowered to 3.1% by the International Monetary Fund. Also, unfavorable movements in foreign currencies add to the woes, largely impacting the company’s international trade.
Earnings Whispers
Our proven model does not conclusively show that Barnes Group 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 a likely earnings beat. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises. That is not the case here as you will see below.
Zacks ESP: Barnes Group has an ESP of -4.48% for the quarter. This is because the Most Accurate Estimate of 64 cents is lower than the Zacks Consensus Estimate of 67 cents.
Zacks Rank: Barnes Group’ Zacks Rank #2 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 they have the right combination of elements to post an earnings beat this quarter, according to our model.
Caterpillar Inc. (CAT - Free Report) , with an Earnings ESP of +1.33% and a Zacks Rank #3.
Stanley Black & Decker, Inc. (SWK - Free Report) , with an Earnings ESP of +1.24% and a Zacks Rank #3.
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Barnes (B) to Report Q3 Earnings: What's in the Cards?
Machinery company Barnes Group Inc. (B - Free Report) is set to release third-quarter 2016 results on Oct 28, before the market opens. The Zacks Consensus Estimate is pegged at 67 cents per share.
Over the last four quarters, Barnes Group delivered better-than-expected results in one, lagged in two and posted in-line results in one. Average earnings surprise was a negative 1.37%. In the last quarter the company’s earnings of 63 cents per share exceeded the Zacks Consensus Estimate of 59 cents by 6.78%.
Let us see how things are shaping up for Barnes Group prior to this announcement.
Factors to Influence Q3 Results
We believe that Barnes Group’s diversified product portfolio and new business will primarily drive the third-quarter results. Also, the company’s inorganic ways of strengthening its business will allow it to offer better and innovative products to customers in various operating regions. During the quarter, the company acquired Adval Tech’s molds business which will compliment its molding solutions business by allowing easy penetration into the plastic injection molding market.
In addition, Barnes Group’s sound capital allocation policy of rewarding its shareholders through dividends and share buybacks will work in its favor. Despite such positives, the company’s growth momentum might get a setback from headwinds from regulatory issues in the aerospace business and stiff competition in the industry.
Also, being an international company, Barnes Group’s performance is largely influenced by prevalent uncertainties in some developed and developing nations. In July, the global economic growth forecast for 2016 was lowered to 3.1% by the International Monetary Fund. Also, unfavorable movements in foreign currencies add to the woes, largely impacting the company’s international trade.
Earnings Whispers
Our proven model does not conclusively show that Barnes Group 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 a likely earnings beat. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises. That is not the case here as you will see below.
Zacks ESP: Barnes Group has an ESP of -4.48% for the quarter. This is because the Most Accurate Estimate of 64 cents is lower than the Zacks Consensus Estimate of 67 cents.
Zacks Rank: Barnes Group’ Zacks Rank #2 when combined with a negative ESP makes surprise prediction difficult.
BARNES GRP Price and EPS Surprise
BARNES GRP Price and EPS Surprise | BARNES GRP Quote
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 they have the right combination of elements to post an earnings beat this quarter, according to our model.
Caterpillar Inc. (CAT - Free Report) , with an Earnings ESP of +1.33% and a Zacks Rank #3.
Ingersoll-Rand Plc (IR - Free Report) , with an Earnings ESP of +0.78% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stanley Black & Decker, Inc. (SWK - Free Report) , with an Earnings ESP of +1.24% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>