Earnings releases so far for the October-December quarter of 2021 had little surprise element. As expected earlier, supply-chain restrictions and cost inflation played a spoilsport for many industrial companies. Solid fundamentals, economic growth and efforts to tackle the inflationary pressures provided support.
Per the latest Earnings Trend report, till Jan 26, 3.8% of the S&P 500 companies belonging to the Zacks Industrial Products sector released results for the October-December quarter. Results reflect a 3.5% year-over-year growth in earnings and a 9.4% increase in revenues. Notably, both earnings and sales beat are at 100%. The sector is currently ranked 9 out of 16. The said sector has dipped 7.4% in the past month, while the S&P 500 has decreased 7.7%.
It is worth noting here that the Industrial Products sector’s earnings are predicted to decline 1.7% for the October-December quarter of 2021 against a 32.9% increase recorded in the previous quarter. The sector’s revenues are projected to grow 8% but margins are anticipated to decline 1.1%. It recorded 14.1% revenue growth and a 1.8% margin expansion in the July-September quarter.
A number of factors are likely to have influenced industrial companies in the October-December quarter.
A brief discussion is provided below.
Key Factors for Industrial Stocks
Economic development led by an increase in exports, hike in consumer spending and spur in inventory investments are expected to have benefited many companies in the sector. The country’s GDP increased 6.9% in the October-December quarter of 2021 compared with 2.3% growth recorded in the previous quarter. Industrial production increased 4% year over year, with manufacturing activities rising 5%.
Infrastructure development, rising demand for clean water and energy resources and surge in e-commerce businesses are anticipated to have aided the performances. Effective pricing actions and focus on product innovation are other tailwinds.
On the flip side, the restricted supply of semiconductor chips and components is likely to have adversely impacted production activities, widening the gap between supply and demand. Also, logistic issues, raw material inflation and high wage costs are likely to have added to woes.
Stocks to Report Results on Feb 2
Four S&P 500 industrial companies are slated to release their results on Feb 2, before market open. A brief discussion on them is provided below.
Emerson Electric Co. (EMR - Free Report) will release first-quarter fiscal 2022 (ended December 2021) results on Feb 2. The company reported better-than-expected results in the last four quarters. It pulled off a trailing four-quarter earnings surprise of 10.69%, on average.
Our proven model does not conclusively predict an earnings beat for Emerson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of beating estimates. That is not the case with Emerson. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, Emerson has a Zacks Rank #4 (Sell) and an Earnings ESP of -1.18%. Supply-chain restrictions and cost inflation are likely to have adversely impacted the results. Strengthening businesses in end markets, synergies from buyouts and operational execution are expected to have aided. (For more information, please read: Emerson to Report Q1 Earnings: What's in the Offing?)
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the company’s first-quarter fiscal 2022 earnings of 99 cents per share marks a 1% decline from the 60-day-ago figure.
Roper Technologies, Inc. (ROP - Free Report) will release results for the fourth quarter of 2021. It recorded better-than-expected results in each of the last four quarters, the earnings surprise being 3.62%, on average.
Currently, Roper has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. The company is likely to have suffered from supply-chain restrictions, high debts and cost inflation. Solid product offerings and buyouts gains are expected to have aided the performance. (For more information, please read: Roper to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for the company’s fourth-quarter earnings has been unchanged at $3.66 per share in the past 60 days.
Avery Dennison Corporation (AVY - Free Report) will report fourth-quarter 2021 results. In the last four quarters, the company recorded better-than-expected results. It pulled off a trailing four-quarter earnings surprise of 9.02%, on average.
Presently, the company has a Zacks Rank #3 and an Earnings ESP of 0.00%. Healthy demand for labeling of consumer products (non-durable), synergies from buyouts and e-commerce trends are likely to have benefited the company in the quarter. Cost inflation, supply-chain restrictions and forex woes are anticipated to have hurt. (For further information, please read: Avery Dennison to Report Q4 Earnings: What's in Store?)
In the past 60 days, the Zacks Consensus Estimate for the company’s quarterly earnings has been stable at $2.15 per share.
Howmet Aerospace Inc. (HWM - Free Report) will release results for the fourth quarter of 2021. It recorded better-than-expected results in three of the last four quarters and in-line results once. Earnings surprise was 10.38%, on average.
Currently, Howmet has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. The company is likely to have suffered from supply-chain restrictions, softness in the commercial defense market and issues with Boeing 787 production. Healthy business in commercial aerospace, innovation investments and effective pricing are expected to have aided earnings. (For more information, please read: Howmet to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for the company’s fourth-quarter earnings has been unchanged at 29 cents per share in the past 60 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
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Earnings releases so far for the October-December quarter of 2021 had little surprise element. As expected earlier, supply-chain restrictions and cost inflation played a spoilsport for many industrial companies. Solid fundamentals, economic growth and efforts to tackle the inflationary pressures provided support.
Per the latest Earnings Trend report, till Jan 26, 3.8% of the S&P 500 companies belonging to the Zacks Industrial Products sector released results for the October-December quarter. Results reflect a 3.5% year-over-year growth in earnings and a 9.4% increase in revenues. Notably, both earnings and sales beat are at 100%. The sector is currently ranked 9 out of 16. The said sector has dipped 7.4% in the past month, while the S&P 500 has decreased 7.7%.
It is worth noting here that the Industrial Products sector’s earnings are predicted to decline 1.7% for the October-December quarter of 2021 against a 32.9% increase recorded in the previous quarter. The sector’s revenues are projected to grow 8% but margins are anticipated to decline 1.1%. It recorded 14.1% revenue growth and a 1.8% margin expansion in the July-September quarter.
A number of factors are likely to have influenced industrial companies in the October-December quarter.
A brief discussion is provided below.
Key Factors for Industrial Stocks
Economic development led by an increase in exports, hike in consumer spending and spur in inventory investments are expected to have benefited many companies in the sector. The country’s GDP increased 6.9% in the October-December quarter of 2021 compared with 2.3% growth recorded in the previous quarter. Industrial production increased 4% year over year, with manufacturing activities rising 5%.
Infrastructure development, rising demand for clean water and energy resources and surge in e-commerce businesses are anticipated to have aided the performances. Effective pricing actions and focus on product innovation are other tailwinds.
On the flip side, the restricted supply of semiconductor chips and components is likely to have adversely impacted production activities, widening the gap between supply and demand. Also, logistic issues, raw material inflation and high wage costs are likely to have added to woes.
Stocks to Report Results on Feb 2
Four S&P 500 industrial companies are slated to release their results on Feb 2, before market open. A brief discussion on them is provided below.
Emerson Electric Co. (EMR - Free Report) will release first-quarter fiscal 2022 (ended December 2021) results on Feb 2. The company reported better-than-expected results in the last four quarters. It pulled off a trailing four-quarter earnings surprise of 10.69%, on average.
Our proven model does not conclusively predict an earnings beat for Emerson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of beating estimates. That is not the case with Emerson. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, Emerson has a Zacks Rank #4 (Sell) and an Earnings ESP of -1.18%. Supply-chain restrictions and cost inflation are likely to have adversely impacted the results. Strengthening businesses in end markets, synergies from buyouts and operational execution are expected to have aided. (For more information, please read: Emerson to Report Q1 Earnings: What's in the Offing?)
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the company’s first-quarter fiscal 2022 earnings of 99 cents per share marks a 1% decline from the 60-day-ago figure.
Roper Technologies, Inc. (ROP - Free Report) will release results for the fourth quarter of 2021. It recorded better-than-expected results in each of the last four quarters, the earnings surprise being 3.62%, on average.
Currently, Roper has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. The company is likely to have suffered from supply-chain restrictions, high debts and cost inflation. Solid product offerings and buyouts gains are expected to have aided the performance. (For more information, please read: Roper to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for the company’s fourth-quarter earnings has been unchanged at $3.66 per share in the past 60 days.
Avery Dennison Corporation (AVY - Free Report) will report fourth-quarter 2021 results. In the last four quarters, the company recorded better-than-expected results. It pulled off a trailing four-quarter earnings surprise of 9.02%, on average.
Presently, the company has a Zacks Rank #3 and an Earnings ESP of 0.00%. Healthy demand for labeling of consumer products (non-durable), synergies from buyouts and e-commerce trends are likely to have benefited the company in the quarter. Cost inflation, supply-chain restrictions and forex woes are anticipated to have hurt. (For further information, please read: Avery Dennison to Report Q4 Earnings: What's in Store?)
In the past 60 days, the Zacks Consensus Estimate for the company’s quarterly earnings has been stable at $2.15 per share.
Howmet Aerospace Inc. (HWM - Free Report) will release results for the fourth quarter of 2021. It recorded better-than-expected results in three of the last four quarters and in-line results once. Earnings surprise was 10.38%, on average.
Currently, Howmet has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. The company is likely to have suffered from supply-chain restrictions, softness in the commercial defense market and issues with Boeing 787 production. Healthy business in commercial aerospace, innovation investments and effective pricing are expected to have aided earnings. (For more information, please read: Howmet to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for the company’s fourth-quarter earnings has been unchanged at 29 cents per share in the past 60 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
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