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What's in Store for Methode Electronics' (MEI) Q4 Earnings?

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Methode Electronics (MEI - Free Report) is set to report fourth-quarter fiscal 2019 results on Jun 20.

We note that, on average, the company has delivered a positive earnings surprise of 22.5% in the trailing four quarters. In the last reported quarter, Methode Electronics delivered positive earnings surprise of 36.7%.

Earnings increased 12.2% on a year-over-year basis to 83 cents per share, primarily driven by 8.3% growth in revenues, which totaled $246.9 million.

Methode Electronics is expected to suffer from lower passenger car demand and production in Europe and Asia in fourth-quarter fiscal 2019.

Europe’s updated emission testing standards are slowing down production of passenger cars, which is hurting Methode Electronics’ growth in the region.

Asia is negatively impacted by the ongoing U.S.-China trade tussle and a slowing China economy. Lower prices are also expected to negatively impact top-line growth in the to-be reported quarter.

Moreover, production rate cut by notable OEMs is expected to hurt growth in North America.
 

Methode Electronics, Inc. Price and EPS Surprise

Methode Electronics, Inc. Price and EPS Surprise

Methode Electronics, Inc. price-eps-surprise | Methode Electronics, Inc. Quote

 

Nevertheless, strong demand for advanced sensor technologies (magnetoelastic sensors) is a key catalyst. Further, Methode Electronics’ Industrial segment is expected to benefit from Grakon’s robust performance in the to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $277.4 million, indicating growth of 11.4% from the figure reported in the year-ago quarter. The consensus mark for the bottom line is 71 cents, unchanged over the past 30 days.

What Our Model Indicates

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Methode Electronics has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks to Consider

Here are a couple of stocks you may want to consider, as our proven model shows that these have the right combination of elements to post an earnings beat.

OSI Systems (OSIS - Free Report) has an Earnings ESP of +2.54% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

MSCI (MSCI - Free Report) has an Earnings ESP of +10% and a Zacks Rank #2.

Alteryx has an Earnings ESP of +13.66% and a Zacks Rank #2.

 

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