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Stanley Black & Decker (SWK) Q4 Earnings: A Beat in Store?
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Industrial tool maker, Stanley Black & Decker, Inc. (SWK - Free Report) is slated to report fourth-quarter 2017 results on Jan 24, before the market opens.
In the past four quarters, the company delivered better-than-expected results, with an average positive earnings surprise of 4.26%. In the last quarter, the company’s earnings of $1.95 per share exceeded the Zacks Consensus Estimate by 4.28%.
In the last three months, the company’s shares have yielded 11.2% return, outperforming 10.2% gain of the industry it belongs to.
Let us see whether Stanley Black & Decker will be able to maintain its earnings streak this quarter.
Factors Likely to Drive Q4 Results
We believe that rise in industrial production, growth in export machinery orders, strengthening housing market and the proposed $1 trillion infrastructure investments by the government are some factors that are favoring the U.S. industrial machinery companies. Also, a healthy global backdrop and continuous advancements in technologies in agriculture, mining, packaged foods and beverages, construction and other industries will keep demand strong for industrial machineries.
Besides a favorable operating environment, we believe that Stanley Black & Decker is poised to benefit from its strengthening end markets and growing brand recognition. For Tools & Storage segment, the company anticipates organic revenues to increase in the high-single digit range in 2017. Results will be primarily driven by fortifying construction market in the United States and relatively stable operating conditions in Europe and the emerging markets. Net revenues from DeWalt FlexVolt are anticipated to be approximately $200 million. Also, benefits from Newell Tools and Craftsman acquisitions will boost the segment’s results.
In the first three quarters of 2017, the company’s Tools & Storage segment pulled off an average positive sales surprise of 2.43%. Fourth-quarter sales are estimated to be $2,320 million, an improvement over average sales of $2,144.3 million generated in the first three quarters of 2017.
Also, Stanley Black & Decker anticipates Industrial segment’s organic revenues to grow in mid-single digits. The Industrial segment’s sales are expected to be $455 million, lower than the average of sales reported in the last three quarters. However, its average sales surprise in the last three quarters was a positive 8.29%.
The company projects Security’s organic sales to grow in low-single digits. The segment’s estimated sales of $499 million are above the average of last three quarter’s reported sales.
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 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 Stanley Black & Decker has been provided below.
Zacks ESP: Stanley Black & Decker has an ESP of +1.14%, with the Most Accurate estimate of $2.16 exceeding the Zacks Consensus Estimate of $2.14.
Stanley Black & Decker, Inc. Price and EPS Surprise
Zacks Rank: Stanley Black & Decker’s Zacks Rank #3 increases the predictive power of ESP.
Note 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 a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other 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.
Lincoln Electric Holdings, Inc. (LECO - Free Report) , with an Earnings ESP of +1.42% and a Zacks Rank #2.
Altra Industrial Motion Corporation , with an Earnings ESP of +1.03% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Stanley Black & Decker (SWK) Q4 Earnings: A Beat in Store?
Industrial tool maker, Stanley Black & Decker, Inc. (SWK - Free Report) is slated to report fourth-quarter 2017 results on Jan 24, before the market opens.
In the past four quarters, the company delivered better-than-expected results, with an average positive earnings surprise of 4.26%. In the last quarter, the company’s earnings of $1.95 per share exceeded the Zacks Consensus Estimate by 4.28%.
In the last three months, the company’s shares have yielded 11.2% return, outperforming 10.2% gain of the industry it belongs to.
Let us see whether Stanley Black & Decker will be able to maintain its earnings streak this quarter.
Factors Likely to Drive Q4 Results
We believe that rise in industrial production, growth in export machinery orders, strengthening housing market and the proposed $1 trillion infrastructure investments by the government are some factors that are favoring the U.S. industrial machinery companies. Also, a healthy global backdrop and continuous advancements in technologies in agriculture, mining, packaged foods and beverages, construction and other industries will keep demand strong for industrial machineries.
Besides a favorable operating environment, we believe that Stanley Black & Decker is poised to benefit from its strengthening end markets and growing brand recognition. For Tools & Storage segment, the company anticipates organic revenues to increase in the high-single digit range in 2017. Results will be primarily driven by fortifying construction market in the United States and relatively stable operating conditions in Europe and the emerging markets. Net revenues from DeWalt FlexVolt are anticipated to be approximately $200 million. Also, benefits from Newell Tools and Craftsman acquisitions will boost the segment’s results.
In the first three quarters of 2017, the company’s Tools & Storage segment pulled off an average positive sales surprise of 2.43%. Fourth-quarter sales are estimated to be $2,320 million, an improvement over average sales of $2,144.3 million generated in the first three quarters of 2017.
Also, Stanley Black & Decker anticipates Industrial segment’s organic revenues to grow in mid-single digits. The Industrial segment’s sales are expected to be $455 million, lower than the average of sales reported in the last three quarters. However, its average sales surprise in the last three quarters was a positive 8.29%.
The company projects Security’s organic sales to grow in low-single digits. The segment’s estimated sales of $499 million are above the average of last three quarter’s reported sales.
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 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 Stanley Black & Decker has been provided below.
Zacks ESP: Stanley Black & Decker has an ESP of +1.14%, with the Most Accurate estimate of $2.16 exceeding the Zacks Consensus Estimate of $2.14.
Stanley Black & Decker, Inc. Price and EPS Surprise
Stanley Black & Decker, Inc. Price and EPS Surprise | Stanley Black & Decker, Inc. Quote
Zacks Rank: Stanley Black & Decker’s Zacks Rank #3 increases the predictive power of ESP.
Note 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 a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other 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.
The Middleby Corporation (MIDD - Free Report) , with an Earnings ESP of +0.54% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lincoln Electric Holdings, Inc. (LECO - Free Report) , with an Earnings ESP of +1.42% and a Zacks Rank #2.
Altra Industrial Motion Corporation , with an Earnings ESP of +1.03% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>