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Is Barnes Group's (B) Q4 Earnings Likely to Disappoint?
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Machinery company Barnes Group Inc. (B - Free Report) is set to release fourth-quarter 2016 results on Feb 17, before the market opens.
The company posted better-than-expected results in two of the four trailing quarters, while recording in-line results in one and lagging in the other. Average earnings surprise was a positive 0.92%. Over the last one month, the company’s shares increased 1.66%, underperforming the gain of 4.16% recorded by the Zacks categorized Machinery General Industrial industry.
Let us see how things are shaping up for Barnes Group this quarter.
Factors to Influence Q4 Results
We believe that Barnes Group’s operations are sensitive to global headwinds, including those arising from soft commodity prices, poor economic conditions in some developed and developing nations and unfavorable foreign currency movements. For 2016, the company anticipates 1% negative impact from forex woes.
Also, the company’s operations are affected by the level of industrial production (which measures the level of output from manufacturing, mining and utilities sectors) in the U.S. In the fourth quarter, industrial production in the country fell 0.6% from the year-ago quarter. We believe that weak industrial activities as well as global economic uncertainties might have adversely impacted Barnes Group’s performances and its overall profitability in the quarter. Moreover, the company’s growth momentum might get a setback from regulatory issues in the aerospace business and stiff competition in the industry. For 2016, the company predicts organic revenue growth to be flat year over year.
Despite these headwinds, we believe that Barnes Group might have benefitted from its diversified product portfolio as well as its organic and inorganic expansion initiatives.
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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Barnes Group has an ESP of 0.00% for the quarter. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 64 cents.
Zacks Rank: Barnes Group currently carries a Zacks Rank #4 (Sell).
As it is we caution against stocks with Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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.
Graham Corporation (GHM - Free Report) , with an Earnings ESP of +16.67% and a Zacks Rank #3.
Caterpillar Inc. (CAT - Free Report) , with an Earnings ESP of +1.85% and a Zacks Rank #3.
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How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
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Is Barnes Group's (B) Q4 Earnings Likely to Disappoint?
Machinery company Barnes Group Inc. (B - Free Report) is set to release fourth-quarter 2016 results on Feb 17, before the market opens.
The company posted better-than-expected results in two of the four trailing quarters, while recording in-line results in one and lagging in the other. Average earnings surprise was a positive 0.92%. Over the last one month, the company’s shares increased 1.66%, underperforming the gain of 4.16% recorded by the Zacks categorized Machinery General Industrial industry.
Let us see how things are shaping up for Barnes Group this quarter.
Factors to Influence Q4 Results
We believe that Barnes Group’s operations are sensitive to global headwinds, including those arising from soft commodity prices, poor economic conditions in some developed and developing nations and unfavorable foreign currency movements. For 2016, the company anticipates 1% negative impact from forex woes.
Also, the company’s operations are affected by the level of industrial production (which measures the level of output from manufacturing, mining and utilities sectors) in the U.S. In the fourth quarter, industrial production in the country fell 0.6% from the year-ago quarter. We believe that weak industrial activities as well as global economic uncertainties might have adversely impacted Barnes Group’s performances and its overall profitability in the quarter. Moreover, the company’s growth momentum might get a setback from regulatory issues in the aerospace business and stiff competition in the industry. For 2016, the company predicts organic revenue growth to be flat year over year.
Despite these headwinds, we believe that Barnes Group might have benefitted from its diversified product portfolio as well as its organic and inorganic expansion initiatives.
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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Barnes Group has an ESP of 0.00% for the quarter. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 64 cents.
Barnes Group, Inc. Price and EPS Surprise
Barnes Group, Inc. Price and EPS Surprise | Barnes Group, Inc. Quote
Zacks Rank: Barnes Group currently carries a Zacks Rank #4 (Sell).
As it is we caution against stocks with Zacks Rank #4 or #5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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.
Illinois Tool Works Inc. (ITW - Free Report) , with an Earnings ESP of +0.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Graham Corporation (GHM - Free Report) , with an Earnings ESP of +16.67% and a Zacks Rank #3.
Caterpillar Inc. (CAT - Free Report) , with an Earnings ESP of +1.85% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>