The Q1 earnings season performance so far has been promising and seems on track to deliver the best quarterly performance in more than six years. Total earnings for the S&P 500 index are expected to be up 20% for this earnings season driven by a 8% rise in revenues. If this materializes, it would surpass fourth-quarter 2017 results where the S&P 500 recorded 13.4% earnings growth on 8.6% revenue growth. To date, 154 S&P 500 members have released results, logging year-over-year earnings growth of 25% on 10.3% higher revenues, per the latest
Earnings Trends.
Industrial Sector Poised for Double Digit Growth
The
Industrial Products sector, currently placed at the top 6% out of the 16 Zacks sectors, is one of the sectors which are expected to record double-digit earnings growth, mainly driven by the U.S. tax reform. According to our latest projections, the sector is anticipated to log an earnings growth of 34.5% in first-quarter 2018 on the back of 15.2% rise in revenues. So far, 45.8% of the members in the sector have reported first-quarter numbers delivering 58% growth in earnings and 18.7% rise in revenues.
Industrial production is one of the leading economic indicators for industrial stocks. For first-quarter 2018, industrial production — a measure of output at factories, mines and utilities — rose at an annual rate of 4.5%.
Further, the U.S Architecture Billings Index (“ABI”), an economic indicator that provides an approximately nine-to-12 month glimpse into the future of non-residential construction spending activity, was 51 in March — increasing for the sixth straight month. Notably, any score more than 50 indicates billings growth and reflects a healthy business environment.
Per the latest report of the Institute for Supply Management (“ISM”), Purchasing Managers Index ("PMI”) was 59.3% in March. This indicates strong growth in manufacturing for the 19th consecutive month, led by continued expansion in new orders, production activity, employment and inventories. A reading above 50% indicates that the manufacturing economy is generally expanding. New orders index is at 61.9, remaining at or above 60 for the 11th straight month. Of the 18 manufacturing industries, 17 industries reported growth in March. The only exception being Apparel, Leather & Allied Products.
It will be interesting to see how some of the machinery stocks fare when they release first-quarter 2018 numbers on Apr 27.
Dover Corporation (
DOV - Free Report) , a global diversified manufacturer of industrial products, is set to release quarterly results before the opening bell.
Dover reported a year-over-year increase in both revenues and earnings in the last reported quarter and also beat the respective Zacks Consensus Estimates. Dover has outpaced the Zacks Consensus Estimate in the trailing four quarters, with an average earnings beat of 7.26%.
Dover Corporation Price and EPS Surprise
Our proven model does not conclusively show that Dover is likely to beat on earnings this quarter as it does not possess the key components. A stock needs to have both a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. This is not the case here.
Dover’s Zacks Rank #3 combined with an Earnings ESP of -0.64%, makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter.
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.
Global provider of highly engineered products and differentiated industrial technologies,
Barnes Group Inc. (
B - Free Report) is scheduled to release quarterly numbers, before the market opens. In the last quarter, the company reported improvement in both top and bottom lines.
The company delivered better-than-expected results in three of the four trailing quarters. Average positive earnings surprise for the four reported quarters is 8.95%.
Barnes Group, Inc. Price and EPS Surprise
Altra Industrial Motion Corp. which designs, produces, and markets mechanical power transmission components worldwide, is scheduled to report quarterly results before the opening bell.
Altra Industrial Motion Corp. Price and EPS Surprise
Altra Industrial Motion sports a Zacks Rank #2, which increases the predictive power of the ESP. However, the company’s Earnings ESP of 0.00% makes surprise prediction difficult.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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 >>
Altra Industrial Motion Corp. Price and EPS Surprise
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 >>
Get the latest research report on DOV - FREE
Get the latest research report on B - FREE