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Actuant (ATU) to Report Q4 Earnings: What's in the Offing?

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Actuant Corporation is scheduled to report fourth-quarter fiscal 2017 (ended Aug 31, 2017) results on Sep 27, before the market opens.

In the last one month, Actuant’s shares yielded a return of 15.2%, outperforming 6.2% growth recorded by the industry.



Over the trailing four quarters, the company recorded an average positive earnings surprise of 4%.

Let’s see how things are shaping up prior to this announcement.

Factors to Play

The ongoing commercial effectiveness actions and lean revitalization moves are anticipated to bolster the core sales of Actuant’s Industrial and Engineered Solutions segment in the quarters ahead. The company also believes its near-term profitability and cash flow will likely improve on the back of the sound restructuring moves. For instance, after divesting the Sanlo product line in August 2016, the company noted that it is limiting activities within the upstream offshore market.

Moreover, Actuant is highly committed toward its shareholders and intends to provide them higher returns on the back of strategic capital deployment programs. The company anticipates free cash flow within the range of $65-$70 million in fiscal 2017. Actuant intends to finance new capital deployment programs with its free cash flow as well as $175-million cash amount from miscellaneous sources.

However, challenging conditions prevalent in the global energy market are expected to hurt Actuant’s top- and bottom-line performances going forward. In addition, the company believes a stronger U.S. dollar might dent its overseas’ revenues and profitability in the near term.

Based on the existing market conditions, Actuant anticipates to generate revenues within the $1.080-$1.090 billion range in fiscal 2017, as against the prior guidance of $1.075-$1.125 billion. Adjusted earnings guidance was lowered to the 82-87 cents per share range from the previous projection of $1.10-$1.20 per share.

Earnings Whispers

Our proven model does not conclusively show that Actuant will likely beat on earnings 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.

 

Actuant Corporation Price and EPS Surprise

Actuant Corporation price-eps-surprise | Actuant Corporation Quote

 

That is not the case here as we will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: Actuant currently has an Earnings ESP of 0.00%. This is because the Zacks Consensus Estimate of 21 cents per share is in line with the Most Accurate estimate.

Zacks Rank: Actuant’s Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Key Picks

Alcoa Corp. (AA - Free Report)  sports a Zacks Rank #1 (Strong Buy) and has an Earnings ESP of +6.8%. You can see the complete list of today’s Zacks Rank #1 Rank stocks here.

AGCO Corporation (AGCO - Free Report) currently flaunts a Zacks Rank #1 and has an Earnings ESP of +2.4%.

Altra Industrial Motion Corp. also sports a Zacks Rank #1 and has an Earnings ESP of +2.9%.

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