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Is a Beat in Store for Mettler-Toledo (MTD) in Q4 Earnings?

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Mettler-Toledo International Inc. (MTD - Free Report) is scheduled to report fourth-quarter 2017 earnings on Feb 8.

The company is likely to deliver a positive surprise this quarter, courtesy of a favorable combination of a Zacks Rank #3 (Hold) and an Earnings ESP of +0.68%.

This is because, as per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Positive Earnings Trend

Mettler-Toledo has an impressive earnings surprise history. The company beat the Zacks Consensus Estimates in each of the last four quarters, with an average positive surprise of 3.49%.

 

In third-quarter 2017, adjusted earnings of $4.36 per share beat the consensus mark by 6 cents and increased 12% year over year.

In the last quarter, net revenues of $653.7 million were up 7.5% year over year, on solid growth in Laboratory and Industrial segments. The company’s strong product pipeline along with Field Turbo investments, marketing initiatives and Spinnaker sales drove the results.

For fourth-quarter 2017, Mettler-Toledo expects local currency sales to grow approximately 5.5%. The Zacks Consensus Estimate for revenues is currently pegged at $764.7 million.

Moreover, adjusted earnings are expected to grow 12% to $5.90 per share. The Zacks Consensus Estimate has increased by a penny to $5.94 in the last 30 days.

Key Factors

Mettler-Toledo’s dominant market position is a key catalyst. The company’s focus on product development, sales & marketing efforts and operational excellence programs are likely to boost results in the soon-to-be-reported quarter.

The company is expected to benefit from strong growth prospects in product inspection and services. Moreover, the China market has recovered and is likely to boost Mettler-Toledo’s sales from industrial business segment.

In the third quarter, Mettler-Toledo acquired Biotix, a manufacturer and distributor of laboratory consumables and liquid handling solutions to the life science market. The acquisition helped the company gain access to indirect distribution channels with robust secondary brands.

Biotix is expected to contribute 1% to the company’s projected local currency sales growth in the quarter. Moreover, favorable foreign exchange is expected to contribute 2% to the top line.

However, higher bonus related expense is expected to keep margins under pressure.

Stocks That Warrant a Look

Here are couple of stocks that you may want to consider as our model shows that they have the right combination of elements to deliver an earnings beat in their upcoming release.

NVIDIA (NVDA - Free Report) has an Earnings ESP of +4.13% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Broadridge Financial Solutions (BR - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank #2.

Activision Blizzard has an Earnings ESP of +4.99% and a Zacks Rank #3.

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