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Fortune Brands (FBHS) to Post Q2 Earnings: What's in Store?
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Fortune Brands Home & Security, Inc. is scheduled to report second-quarter 2020 results on Jul 29, after market close.
The company delivered better-than-expected results twice in the last four quarters, while missing and meeting estimates once each. Earnings surprise for the last four quarters was 4.61%, on average. In the first quarter of 2020, it posted earnings of 81 cents per share, which beat the Zacks Consensus Estimate of 69 cents by 17.39%.
In the past three months, the company has gained 42.9% compared with the industry’s growth of 18.2%.
Factors at Play
Healthy demand for decking products and solid momentum in its security business, supported by incremental investments for product line expansion, is expected to have boosted second-quarter revenues of the Doors & Security segment. Also, strength across its plumbing business, driven by the success of its category and channel expansion strategies, is anticipated to have supported the company’s Plumbing segment’s revenues. In addition, the growing popularity of its value price point cabinetry products is expected to have supported the Cabinets segment.
Also, the company’s acquisition of Fiberon (September 2018), which has been complementing its existing door brand — Therma-Tru — and enhancing growth opportunities in the outdoor living space, is likely to have supported second-quarter revenues. Further, the distribution partnership with OrePac (inked in July 2019) is anticipated to have proven beneficial for its top line in the quarter.
Moreover, its supply-chain and manufacturing footprint-optimization initiatives along with some of the cost-control actions taken like the reduction of operating expenses and non-essential capital expenditure might have helped it maintain a healthy margin performance in the second quarter. However, high costs and expenses are expected to have adversely impacted the company’s margin and profitability.
Also, low demand environment caused by the coronavirus outbreak-led market downturn is anticipated to have an adverse impact on its top-line performance. Notably, temporary operational shutdowns at some of its facilities along with the impacts of the governmental regulations imposed in response to the crisis might have had a bearing on the company’s performance.
Notably, the Zacks Consensus Estimate for the Plumbing segment's revenues is pegged at $447 million, reflecting a decline of 4.7% sequentially. The consensus estimate for Cabinets segment’s revenues stands at $535 million, implying a decline of 13.7% from the reported figure in the previous quarter. The consensus mark for Doors & Security segment’s revenues stands at $316 million, implying a 0.6% sequential increase.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The case with Fortune Brands is given below:
Earnings ESP: The company has an Earnings ESP of +9.08% as the Most Accurate Estimate is pegged at 65 cents, higher than the Zacks Consensus Estimate of 59 cents.
Fortune Brands Home Security, Inc. Price and EPS Surprise
Zacks Rank: Fortune Brands carries a Zacks Rank #1, which when combined with a positive ESP, makes us confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Other Key Picks
Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:
Greif, Inc. (GEF - Free Report) currently has a Zacks Rank #3 and an Earnings ESP of +3.41%.
Eaton Corporation, plc (ETN - Free Report) presently has a Zacks Rank #3 and an Earnings ESP of +5.80%.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
Fortune Brands (FBHS) to Post Q2 Earnings: What's in Store?
Fortune Brands Home & Security, Inc. is scheduled to report second-quarter 2020 results on Jul 29, after market close.
The company delivered better-than-expected results twice in the last four quarters, while missing and meeting estimates once each. Earnings surprise for the last four quarters was 4.61%, on average. In the first quarter of 2020, it posted earnings of 81 cents per share, which beat the Zacks Consensus Estimate of 69 cents by 17.39%.
In the past three months, the company has gained 42.9% compared with the industry’s growth of 18.2%.
Factors at Play
Healthy demand for decking products and solid momentum in its security business, supported by incremental investments for product line expansion, is expected to have boosted second-quarter revenues of the Doors & Security segment. Also, strength across its plumbing business, driven by the success of its category and channel expansion strategies, is anticipated to have supported the company’s Plumbing segment’s revenues. In addition, the growing popularity of its value price point cabinetry products is expected to have supported the Cabinets segment.
Also, the company’s acquisition of Fiberon (September 2018), which has been complementing its existing door brand — Therma-Tru — and enhancing growth opportunities in the outdoor living space, is likely to have supported second-quarter revenues. Further, the distribution partnership with OrePac (inked in July 2019) is anticipated to have proven beneficial for its top line in the quarter.
Moreover, its supply-chain and manufacturing footprint-optimization initiatives along with some of the cost-control actions taken like the reduction of operating expenses and non-essential capital expenditure might have helped it maintain a healthy margin performance in the second quarter. However, high costs and expenses are expected to have adversely impacted the company’s margin and profitability.
Also, low demand environment caused by the coronavirus outbreak-led market downturn is anticipated to have an adverse impact on its top-line performance. Notably, temporary operational shutdowns at some of its facilities along with the impacts of the governmental regulations imposed in response to the crisis might have had a bearing on the company’s performance.
Notably, the Zacks Consensus Estimate for the Plumbing segment's revenues is pegged at $447 million, reflecting a decline of 4.7% sequentially. The consensus estimate for Cabinets segment’s revenues stands at $535 million, implying a decline of 13.7% from the reported figure in the previous quarter. The consensus mark for Doors & Security segment’s revenues stands at $316 million, implying a 0.6% sequential increase.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The case with Fortune Brands is given below:
Earnings ESP: The company has an Earnings ESP of +9.08% as the Most Accurate Estimate is pegged at 65 cents, higher than the Zacks Consensus Estimate of 59 cents.
Fortune Brands Home Security, Inc. Price and EPS Surprise
Fortune Brands Home Security, Inc. price-eps-surprise | Fortune Brands Home Security, Inc. Quote
Zacks Rank: Fortune Brands carries a Zacks Rank #1, which when combined with a positive ESP, makes us confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Ranks #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Other Key Picks
Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:
AptarGroup, Inc. (ATR - Free Report) has an Earnings ESP of +12.47% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Greif, Inc. (GEF - Free Report) currently has a Zacks Rank #3 and an Earnings ESP of +3.41%.
Eaton Corporation, plc (ETN - Free Report) presently has a Zacks Rank #3 and an Earnings ESP of +5.80%.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>