Industrial Stocks Earnings Roster for Jan 30: DOV, PNR & More

A few industrial machinery companies have lined up to report quarterly numbers on Jan 30.  The industrial products sector (one of the 16 broad Zacks sectors) is among the Zacks sectors anticipated to rack up the strongest gains in the fourth quarter. Overall fourth-quarter earnings for the sector are projected to climb 29.5% while revenues are expected to go up 13.7%, per the latest projections.

 

The fourth-quarter earnings projections for the industrial sector is backed by upbeat manufacturing data, strong housing and commercial construction markets, growth in job additions and an improving U.S economy. Industrial production, which is considered one of the leading economic indicators for industrial stocks, jumped 8.2% at an annual rate in the fourth quarter. It is a measure of the level of output of manufacturing, mining and utilities sectors in a country. The upbeat performance can be attributed to a 7% jump in manufacturing and 12.7% in mining output in the quarter. Further, it has gained 3.6% in a year, logging its biggest calendar-year gain since 2010.

 

Manufacturing activity also closed on a high in 2017 as evident from the December PMI (Purchasing Managers' Index) reading of 59.7, per the Institute for Supply Management (“ISM”). The reading also marked the fastest pace of expansion since 2011. The PMI is an indicator of the economic health of the manufacturing sector with a reading above 50 signalling increased factory activity. The score can be attributed to strong expansion in new orders and production, both delivering positive growth trends for 16 straight months. Further, 16 of 18 industries delivered growth during the month. With this reading, manufacturing has delivered positive growth for 16 consecutive months. Notably, in 2017, the ISM manufacturing index averaged the highest readings for a calendar year since the last 13 years.

 

In the past year, the industrial products sector has clocked a gain of 27.1%, ahead of the S&P 500’s advance of 19.6%. The industrial products sector is currently enjoying a Zacks Sector Rank of 5. This can be attributed to the fact that the majority of the 214 industries within this sector has performed well lately and are poised to take the momentum ahead in the coming quarters.

 

It will be interesting to see how some of the industrial stocks fare when they release December ending quarter numbers on Jan 30. 

 

Dover Corporation (DOV - Free Report) , which manufactures and sells a wide range of industrial products, is scheduled to report fourth-quarter fiscal 2017 results before the opening bell. The company registered a year-over-year improvement in both top and bottom-line in the last reported quarter.

 

In the preceding quarter, the company delivered a positive earnings surprise of 4.50%. However, despite the company beating the Zacks Consensus Estimate for earnings in three of the trailing four quarters, it has an average negative earnings surprise history of 1.22%.

The Zacks Consensus Estimate for the Energy segment’s revenues is currently at $649 million, displaying year-over-year growth of 4%. Revenue growth for the segment continues to be driven by significant improvement in early-cycle oil and gas fundamentals, particularly U.S. rig count and well completions. The Zacks Consensus Estimate for the segment’s operating earnings is pegged at $54 million, a 75% projected year-over-year increase.

 

For the Engineered Systems segment, revenues for the fourth quarter is pegged at $649 million, a 4% projected year-over-year growth. The segment’s operating earnings is anticipated at $102 million, reflecting 5% annual growth. For the Fluids segment, the Zacks Consensus Estimate for revenues is pegged at $622 million, a projected 29% year-over-year rise on acquisition growth. The Zacks Consensus Estimate for the segment’s operating earnings is $90 million, a substantial improvement of 160% year over year and a 3% sequential rise. (Read more: Factors That Are Likely to Impact Dover's Q4 Earnings)

 

Dover carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Pentair plc (PNR - Free Report) delivers industry-leading products, services and solutions for its customers' diverse needs in water and other fluids, along with thermal management and equipment protection. It is scheduled to report fourth-quarter 2017 results before the opening bell. The company delivered improved revenues and earnings in the last reported quarter.

 

Last quarter, the company’s adjusted earnings surpassed the Zacks Consensus Estimate by more than 2%. Notably, Pentair’s earnings have surpassed estimates in three of the trailing four quarters, with an average positive earnings surprise of 3.89%.