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Factors Likely to Influence Snap-On's (SNA) Q2 Earnings

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Snap-On Inc. (SNA - Free Report) is scheduled to report second-quarter 2020 results on Jul 31. In the last reported quarter, this global provider of professional tools, equipment and related solutions delivered a negative earnings surprise of 5.5%. The company has delivered a negative earnings surprise of 1%, on average, in the trailing four quarters.

The consensus mark for the company’s second-quarter earnings is pegged at $1.94 per share, which suggests a decline of 39.8% from the year-ago quarter’s reported figure. However, the consensus mark for the same has moved 3.2% north in the past seven days. For second-quarter revenues, the consensus mark is pegged at $707.5 million, which indicates a 25.6% decrease from the prior-year quarters reported figure.

Key Factors to Note

Snap-On has been witnessing sluggish sales volume across all geographies and various customer groups, including the automotive repair, due to the ongoing COVID-19 outbreak, which intensified during the first quarter. Due to the same reason, management, in its last earnings call, anticipated sales and credit originations to decline year over year in second-quarter 2020. Apart from these, adverse impacts of foreign currency have been exerting pressure on the company’s overall performance and segmental results for a while now.

Nevertheless, it is making efforts, including cost-cutting initiatives and the Rapid Continuous Improvement (RCI) plan, to combat the uncertain COVID-19 impacts. Notably, its robust business model and focus on value-creation processes have been aiding the company’s earnings. Moreover, this RCI program, designed to enhance organizational effectiveness and efficiency and generate savings, has been aiding margins. Such endeavors are likely to have provided some cushion to the company’s second-quarter performance.

SnapOn Incorporated Price and EPS Surprise

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Snap-onthis 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 an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Snap-oncarries a Zacks Rank #4 (Sell) and an Earnings ESP of -12.46%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Hanesbrands (HBI - Free Report) currently has an Earnings ESP of +120.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Rent-A-Center (RCII - Free Report) currently has an Earnings ESP of +3.39% and a Zacks Rank #3.

Spectrum Brands (SPB - Free Report) currently has an Earnings ESP of +4.85% and a Zacks Rank #3.

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