Stanley Black & Decker, Inc. ( SWK Quick Quote SWK - Free Report) is slated to report third-quarter 2020 results on Oct 27, before market open. The company delivered better-than-expected results in the last four quarters, with an earnings surprise of 9.64%, on average. Notably, its second-quarter 2020 earnings of $1.60 per share surpassed the Zacks Consensus Estimate of $1.27. In the past three months, shares of the company gained 16.4% compared with the industry’s growth of 14.7%.
Let us delve deeper.
Key Factors & Estimates for Q3
The impacts of improved operating conditions for manufacturing companies in the third quarter — evident from a 39.8% year-over-year increase in industrial production in the U.S. and a rise of ISM Purchasing Managers' Index from 52.6% in June to 55.4% in September — are expected to get reflected in Stanley Black’s results.
Apart from this, increasing preference for products related to safety and health, and do-it-yourself applications as well as any growth investments in Tools & Storage, and Security segments are likely to have aided the company’s top line in the third quarter. Also, a focus on product innovation and a surge in business from the e-commerce platform are expected to have been tailwinds. Acquisitions too have been benefiting the company over time, with contributions of 2% in both the second quarter and the first quarter. This trend might have continued in the third quarter as well. On the flip side, the lingering impacts of the pandemic-led adversities are anticipated to have hurt results. The Zacks Consensus Estimate for revenues in the third quarter is pegged at $3,922 million, suggesting a 8% increase from the year-ago quarter’s reported number and 24.6% growth from the last reported quarter. For the Security segment, the Zack Consensus Estimate for third-quarter sales is pegged at $442 million, indicating a 5.2% decrease from the year-ago reported figure and 2.1% growth sequentially. Further, sales estimates for the Tools & Storage segment are pegged at $2,924 million. This suggests growth of 15.4% from the year-ago reported number and a 33.1% increase from the previous quarter’s reported figure. In addition, the company’s cost-saving measures, including those taken in April 2020 and October 2019, are expected to have yielded benefits and aided margins. However, a trend of adverse impacts of forex woes and tariffs are anticipated to get reflected in third-quarter results. Also, high debts have been concerning. The Zack Consensus Estimate for the company’s third-quarter earnings is pegged at $2.67, indicating an increase of 25.3% from the year-ago reported figure and 66.9% from the previous quarter. Earnings Whispers
Our proven model suggests an earnings beat for Stanley Black this 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. The case with Stanley Black & Decker is shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Stanley Black has an Earnings ESP of +3.28%, with the Most Accurate Estimate of $2.76 above the Zacks Consensus Estimate of $2.67. Earnings ESP: