The third-quarter earnings season is almost in the final lap with 406 members of the S&P 500 Index having reported their quarterly numbers, which makes up 85.4% of the Index’s total market capitalization. Per the latest status as of Nov 3, these companies have put a 7.5% increase in earnings on the back of 6.3% higher sales on the scoreboard. Around 73.9% of these companies delivered positive earnings surprises while 66.7% surpassed revenue expectations. (Read more: The Tech Sector's Impressive Earnings Power on Display)
Taking into account all the S&P 500 members that are yet to disclose their numbers, total earnings for the index is expected to be up 6.5% year over year on a 5.6% increase in revenues in the third quarter. This marks a deceleration from the 11.2% increase in earnings in the second quarter and 13.6% in the first. Nevertheless, despite lower growth projections, total earnings in dollar amount is likely to hit all-time quarterly record at $302.7 billion in the third quarter.
Further, earnings growth graph will eventually pick up from fourth quarter onwards as evident from our projections. Earnings growth will be 8.4% in fourth-quarter 2017, 8.9% in first-quarter 2018, 8.9% in the second and 9.6% in third-quarter 2018. Consequently, these quarters are set to break the expected record levels in the third quarter in dollar terms.
Industrial Products Sector to Log Growth
Industrial production — a measure of the level of output of manufacturing, mining and utilities sectors in a country — dipped at an annual rate of 1.5% in the third quarter. Excluding the effects of the hurricanes, the index would have risen at least 0.5%. Prior to the storms, the manufacturing sector had been buoyed by a stronger global economy that translated to greater demand for manufactured products.
Despite this setback, the industrial products sector, one of the 16 Zacks sectors, is anticipated to log growth of 18.5% in third-quarter earnings while revenues will rise 4.4%. Notably, it is one of the nine sectors that is anticipated to log positive growth this quarter. Also, the industrial products’ upbeat growth projections puts it just a pace behind Energy Sector’s projected 153.1% earnings growth and the Technology sector’s 20.1%.
In this context, we take a sneak peek into three industrial products stocks that are slated to report their third-quarter results on Nov 8.
Sealed Air Corporation (SEE - Free Report) is a provider of food safety and security, facility hygiene, and product protection solutions worldwide. The company will report financial results before the market opens. The company’s earnings surpassed estimates in two of the trailing four quarters, with an average negative earnings surprise of 1.64%.
Sealed Air Corporation Price and EPS Surprise
However, the company currently carries a Zacks Rank #4 (Sell) which when combined with earnings ESP of +3.30% makes surprise prediction difficult. As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Per the Zacks Consensus Estimates, total revenues are expected to inch up 0.03% in the third quarter. The Product Care segment’s revenues are anticipated to go up 3% year over year while the Food Care segment’s revenue will decline 14% year over year. Per projections, volume growth in the Product Care segment will be 0.03%, much lower than 6.1% growth witnessed in second-quarter 2017 and 10.1% in the prior-year third quarter. Volume growth in the Food Care segment will be 0.02%, lower than the 2.7% growth witnessed in second-quarter 2017 but nevertheless an improvement from the 0.6% dip in volumes in the prior-year third quarter.
Volumes growth in North America are likely to remain strong as a result of continued adoption of the company’s innovative solutions and strong-end market demand across all proteins as well as within the e-commerce and fulfillment sectors. However, continued economic uncertainty along with social and political instability in Latin America and EMEA will affect volumes in the region.
Divestment of Diversey Care division as well as the food hygiene and cleaning business within the Food Care division, will be substantially dilutive to earnings in the third quarter. Further, costs associated with the Diversey Care operations and various restructuring actions underway will strain margins. Further, recent resin price increases will dent margins. The Zacks Consensus Estimate for earnings is currently pegged at 46 cents, reflecting a 35.92% year-over-year decline. (Read more: Will Sealed Air Miss Q3 Earnings on Lower Volumes?)
SiteOne Landscape Supply, Inc. (SITE - Free Report) , a wholesale distributor of landscape supplies primarily in the United States, will report quarterly results before the market opens.
The company recorded an average negative earnings surprise of 22.30% over the last four quarters. Our proven model does not conclusively show that the company is likely to beat estimates this quarter.
SiteOne Landscape Supply, Inc. Price and EPS Surprise
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>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The third-quarter earnings season is almost in the final lap with 406 members of the S&P 500 Index having reported their quarterly numbers, which makes up 85.4% of the Index’s total market capitalization. Per the latest status as of Nov 3, these companies have put a 7.5% increase in earnings on the back of 6.3% higher sales on the scoreboard. Around 73.9% of these companies delivered positive earnings surprises while 66.7% surpassed revenue expectations. (Read more: The Tech Sector's Impressive Earnings Power on Display)
Taking into account all the S&P 500 members that are yet to disclose their numbers, total earnings for the index is expected to be up 6.5% year over year on a 5.6% increase in revenues in the third quarter. This marks a deceleration from the 11.2% increase in earnings in the second quarter and 13.6% in the first. Nevertheless, despite lower growth projections, total earnings in dollar amount is likely to hit all-time quarterly record at $302.7 billion in the third quarter.
Further, earnings growth graph will eventually pick up from fourth quarter onwards as evident from our projections. Earnings growth will be 8.4% in fourth-quarter 2017, 8.9% in first-quarter 2018, 8.9% in the second and 9.6% in third-quarter 2018. Consequently, these quarters are set to break the expected record levels in the third quarter in dollar terms.
Industrial Products Sector to Log Growth
Industrial production — a measure of the level of output of manufacturing, mining and utilities sectors in a country — dipped at an annual rate of 1.5% in the third quarter. Excluding the effects of the hurricanes, the index would have risen at least 0.5%. Prior to the storms, the manufacturing sector had been buoyed by a stronger global economy that translated to greater demand for manufactured products.
Despite this setback, the industrial products sector, one of the 16 Zacks sectors, is anticipated to log growth of 18.5% in third-quarter earnings while revenues will rise 4.4%. Notably, it is one of the nine sectors that is anticipated to log positive growth this quarter. Also, the industrial products’ upbeat growth projections puts it just a pace behind Energy Sector’s projected 153.1% earnings growth and the Technology sector’s 20.1%.
In this context, we take a sneak peek into three industrial products stocks that are slated to report their third-quarter results on Nov 8.
Sealed Air Corporation (SEE - Free Report) is a provider of food safety and security, facility hygiene, and product protection solutions worldwide. The company will report financial results before the market opens. The company’s earnings surpassed estimates in two of the trailing four quarters, with an average negative earnings surprise of 1.64%.
Sealed Air Corporation Price and EPS Surprise
However, the company currently carries a Zacks Rank #4 (Sell) which when combined with earnings ESP of +3.30% makes surprise prediction difficult. As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Per the Zacks Consensus Estimates, total revenues are expected to inch up 0.03% in the third quarter. The Product Care segment’s revenues are anticipated to go up 3% year over year while the Food Care segment’s revenue will decline 14% year over year. Per projections, volume growth in the Product Care segment will be 0.03%, much lower than 6.1% growth witnessed in second-quarter 2017 and 10.1% in the prior-year third quarter. Volume growth in the Food Care segment will be 0.02%, lower than the 2.7% growth witnessed in second-quarter 2017 but nevertheless an improvement from the 0.6% dip in volumes in the prior-year third quarter.
Volumes growth in North America are likely to remain strong as a result of continued adoption of the company’s innovative solutions and strong-end market demand across all proteins as well as within the e-commerce and fulfillment sectors. However, continued economic uncertainty along with social and political instability in Latin America and EMEA will affect volumes in the region.
Divestment of Diversey Care division as well as the food hygiene and cleaning business within the Food Care division, will be substantially dilutive to earnings in the third quarter. Further, costs associated with the Diversey Care operations and various restructuring actions underway will strain margins. Further, recent resin price increases will dent margins. The Zacks Consensus Estimate for earnings is currently pegged at 46 cents, reflecting a 35.92% year-over-year decline. (Read more: Will Sealed Air Miss Q3 Earnings on Lower Volumes?)
SiteOne Landscape Supply, Inc. (SITE - Free Report) , a wholesale distributor of landscape supplies primarily in the United States, will report quarterly results before the market opens.
The company recorded an average negative earnings surprise of 22.30% over the last four quarters. Our proven model does not conclusively show that the company is likely to beat estimates this quarter.
SiteOne Landscape Supply, Inc. Price and EPS Surprise
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>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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