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Segmental Business to Drive Barnes Group's (B) Q3 Earnings?
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Machinery company Barnes Group Inc. (B - Free Report) is set to release third-quarter 2017 results on Oct 27, before the market opens.
In the past four quarters, the company delivered better-than-expected results, pulling off an average positive earnings surprise of 11.60%. In the last quarter, the company’s earnings of 81 cents per share exceeded the Zacks Consensus Estimate by 17.39%.
Since the second-quarter 2017 results on Jul 28, the company’s shares have yielded 19.5% return, outperforming 10.4% gain of the industry it belongs to.
Let us see whether Barnes Group will be able to maintain its earnings streak this quarter.
Factors Likely to Drive Q3 Results
Barnes Group derives a major portion of its revenues (roughly 67% in 2016) from the Industrial segment. Increased governmental spending on infrastructure improvement, better business opportunities in China and emerging nations, and rise in healthcare requirements for an aging population will benefit the company’s business in the general industrial end market. Also, rise of 2 percentage points in Purchasing Managers’ Index or manufacturing index in September for the United States is a positive indicator.
In the transportation end market, anticipated rise in light vehicle production globally, adherence to fuel efficiency standards and need for technologically advanced components will benefit the Industrial segment.
In the first two quarters of 2017, the surprise history of Industrial segment has been impressive, with an average positive sales surprise of 7.17%. Third-quarter sales are projected to be $235 million.
Barnes serves the aerospace market by providing highly advanced manufacturing solutions as well as overhauling and repair services to jet manufacturers, military customers and commercial airlines. Strong commercial aircraft deliveries expected in the years ahead and rising requirement of aftermarket services bode well for Barnes’ Aerospace segment.
In the first two quarters of 2017, the Aerospace segment pulled off an average positive sales surprise of 9.8%. Third-quarter sales are estimated to be $117 million, better than average quarterly sales of $113.5 million generated in the first half of 2017.
Additionally, we believe that Barnes Group’s inorganic initiatives, especially the acquired assets of FOBOHA (2016) and Gammaflux L.P. (2017) will be beneficial. Productivity improvement is ensured by following the Barnes Enterprise System.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 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.
The case with Barnes Group is given below.
Zacks ESP: Earnings ESP of Barnes Group is currently +1.08%. This is because the Most Accurate estimate of 70 cents is above the Zacks Consensus Estimate of 69 cents.
Zacks Rank: Barnes Group’s Zacks Rank #1 when combined with a positive ESP makes surprise prediction easy.
Note that 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.
Other Stocks to Consider
Here are some other companies in the 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.
Roper Technologies, Inc. (ROP - Free Report) , with an Earnings ESP of +0.13% and a Zacks Rank #2.
Nordson Corporation (NDSN - Free Report) , with an Earnings ESP of +0.85% and a Zacks Rank #2.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Image: Bigstock
Segmental Business to Drive Barnes Group's (B) Q3 Earnings?
Machinery company Barnes Group Inc. (B - Free Report) is set to release third-quarter 2017 results on Oct 27, before the market opens.
In the past four quarters, the company delivered better-than-expected results, pulling off an average positive earnings surprise of 11.60%. In the last quarter, the company’s earnings of 81 cents per share exceeded the Zacks Consensus Estimate by 17.39%.
Since the second-quarter 2017 results on Jul 28, the company’s shares have yielded 19.5% return, outperforming 10.4% gain of the industry it belongs to.
Let us see whether Barnes Group will be able to maintain its earnings streak this quarter.
Factors Likely to Drive Q3 Results
Barnes Group derives a major portion of its revenues (roughly 67% in 2016) from the Industrial segment. Increased governmental spending on infrastructure improvement, better business opportunities in China and emerging nations, and rise in healthcare requirements for an aging population will benefit the company’s business in the general industrial end market. Also, rise of 2 percentage points in Purchasing Managers’ Index or manufacturing index in September for the United States is a positive indicator.
In the transportation end market, anticipated rise in light vehicle production globally, adherence to fuel efficiency standards and need for technologically advanced components will benefit the Industrial segment.
In the first two quarters of 2017, the surprise history of Industrial segment has been impressive, with an average positive sales surprise of 7.17%. Third-quarter sales are projected to be $235 million.
Barnes serves the aerospace market by providing highly advanced manufacturing solutions as well as overhauling and repair services to jet manufacturers, military customers and commercial airlines. Strong commercial aircraft deliveries expected in the years ahead and rising requirement of aftermarket services bode well for Barnes’ Aerospace segment.
In the first two quarters of 2017, the Aerospace segment pulled off an average positive sales surprise of 9.8%. Third-quarter sales are estimated to be $117 million, better than average quarterly sales of $113.5 million generated in the first half of 2017.
Additionally, we believe that Barnes Group’s inorganic initiatives, especially the acquired assets of FOBOHA (2016) and Gammaflux L.P. (2017) will be beneficial. Productivity improvement is ensured by following the Barnes Enterprise System.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 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.
The case with Barnes Group is given below.
Zacks ESP: Earnings ESP of Barnes Group is currently +1.08%. This is because the Most Accurate estimate of 70 cents is above the Zacks Consensus Estimate of 69 cents.
Barnes Group, Inc. Price and EPS Surprise
Barnes Group, Inc. Price and EPS Surprise | Barnes Group, Inc. Quote
Zacks Rank: Barnes Group’s Zacks Rank #1 when combined with a positive ESP makes surprise prediction easy.
Note that 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.
Other Stocks to Consider
Here are some other companies in the 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.
GGG Inc. (GGG - Free Report) , with an Earnings ESP of +2.14% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Roper Technologies, Inc. (ROP - Free Report) , with an Earnings ESP of +0.13% and a Zacks Rank #2.
Nordson Corporation (NDSN - Free Report) , with an Earnings ESP of +0.85% and a Zacks Rank #2.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>