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Industrial Stocks Q4 Earnings Roster for Feb 3: GWW and AVY
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So far, 10.3% of the S&P participants in the Industrial Products sector have reported fourth-quarter 2020 results — logging a decline of 13.4% in earnings, per the latest Earnings Trends report. For the fourth quarter as a whole, the sector is anticipated to witness a slump of 7.2% in earnings, with revenues down 2.4%. However, the decline is not restricted to this sector alone, as nine of the 16 Zacks sectors are expected to log year-over-year declines this season.
On a positive note, the Industrial sector is one of the four sectors that are expected to witness decline in single digits, while double-digit declines anticipated for four sectors. In fact, two sectors are now anticipated to lose money for the third consecutive quarter (declines in excess of 100%). The Industrial Products sector’s results are expected to reflect the pickup in manufacturing activity and improvement in order levels through the last quarter of 2020. However, the impact of the pandemic still remains a headwind.
Factors to Note
Per the Institute for Supply Management, the U.S Purchasing Managers’ Index (PMI) came in at 59.3% in October, 57.5% in November and 60.7% in December — denoting expansion. Also, industrial production increased at an annual rate of 8.4% for the October-December quarter. These figures indicate that activity in the manufacturing sector has picked up after the COVID-19 induced slowdown aided by gradual resumption of the global economic activities and reopening of businesses. Consequently, the quarterly results of the industry participants are likely to reflect this improvement.
However, the challenges associated with the pandemic, which include supply chain disruptions, and low demand in certain markets, are likely to have weighed on the industry players’ performance in the quarter to be reported. Capital expenditures in oil & gas, mining are likely to have been restrained. Residential markets remained resilient in the United States. The sector players engaged in packaging for food, medicines, home and personal-care products might have benefited from higher demand during the pandemic.
To counter the impact of weak demand, many of the sector participants have been focusing on cost cutting measures and making efforts to improve productivity and efficiency. This may have contributed to margin performance in the quarter to be reported.
The world's largest manufacturer of heavy industrial equipment, Caterpillar Inc. (CAT - Free Report) , which is viewed as a bellwether for the global economy, reported fourth-quarter 2020 results on Jan 29. The bottom line declined 22% on a 15% drop in revenues on account of lower sales volume. This was primarily due to low end-user demand amid the coronavirus pandemic and the impact of changes in dealer inventories. The company’s cost cutting efforts somewhat mitigated the impact. Caterpillar, however, reported an improvement in fourth-quarter backlog and stated that it expects first-quarter 2021 results to come in higher reflecting stronger year-over-year sales to users and dealer restocking.
It will be interesting to see how some of the companies belonging to this sector fare when they release quarterly numbers on Feb 3.
W.W. Grainger, Inc. (GWW - Free Report) is scheduled to report fourth-quarter 2020 results before the opening bell. The company has surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice. It has a trailing four-quarter earnings surprise of 2.35%, on average.
Our proven model does not conclusively predict an earnings beat for Grainger this time around. Grainger has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Grainger has been experiencing a surge in sales of personal protective equipment (PPE) and safety and cleaning products courtesy of higher customer demand in response to the coronavirus pandemic. This along with higher e-commerce sales might get reflected in fourth-quarter revenues. However, shift in demand toward lower-margin products and higher operating costs, negated by gains from the company’s ongoing cost control measures is likely to have impacted the to-be-reported quarter’s performance. (Read more: Grainger to Report Q4 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for Grainger’s fourth-quarter 2020 earnings is currently pegged at $3.78, which indicates a decline of 2.6% from the year-ago quarter. The estimate has remained stable over the past 30 days.
Avery Dennison Corporation (AVY - Free Report) is scheduled to report fourth-quarter 2020 results before the opening bell. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 12.8%.
Avery Dennison currently has an Earnings ESP of -0.97% and a Zacks Rank of 2.
The company’s fourth-quarter overall sales are anticipated to reflect the impact of weak demand amid the pandemic. Nevertheless, the company is likely to have benefited from acquisitions and growth in high-value product categories during the October-December period. Avery Dennison has been executing various long-term productivity and temporary cost saving actions during the pandemic. This is likely to have driven margins and earnings in the quarter under review. (Read more: Avery Dennison to Report Q4 Earnings: What's in Store?)
The Zacks Consensus Estimate for the company’s fourth-quarter earnings has gone up 2% to $2.17 per share over the past 30 days. The figure suggests an improvement of 25% from the prior-year reported figure.
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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Industrial Stocks Q4 Earnings Roster for Feb 3: GWW and AVY
So far, 10.3% of the S&P participants in the Industrial Products sector have reported fourth-quarter 2020 results — logging a decline of 13.4% in earnings, per the latest Earnings Trends report. For the fourth quarter as a whole, the sector is anticipated to witness a slump of 7.2% in earnings, with revenues down 2.4%. However, the decline is not restricted to this sector alone, as nine of the 16 Zacks sectors are expected to log year-over-year declines this season.
On a positive note, the Industrial sector is one of the four sectors that are expected to witness decline in single digits, while double-digit declines anticipated for four sectors. In fact, two sectors are now anticipated to lose money for the third consecutive quarter (declines in excess of 100%). The Industrial Products sector’s results are expected to reflect the pickup in manufacturing activity and improvement in order levels through the last quarter of 2020. However, the impact of the pandemic still remains a headwind.
Factors to Note
Per the Institute for Supply Management, the U.S Purchasing Managers’ Index (PMI) came in at 59.3% in October, 57.5% in November and 60.7% in December — denoting expansion. Also, industrial production increased at an annual rate of 8.4% for the October-December quarter. These figures indicate that activity in the manufacturing sector has picked up after the COVID-19 induced slowdown aided by gradual resumption of the global economic activities and reopening of businesses. Consequently, the quarterly results of the industry participants are likely to reflect this improvement.
However, the challenges associated with the pandemic, which include supply chain disruptions, and low demand in certain markets, are likely to have weighed on the industry players’ performance in the quarter to be reported. Capital expenditures in oil & gas, mining are likely to have been restrained. Residential markets remained resilient in the United States. The sector players engaged in packaging for food, medicines, home and personal-care products might have benefited from higher demand during the pandemic.
To counter the impact of weak demand, many of the sector participants have been focusing on cost cutting measures and making efforts to improve productivity and efficiency. This may have contributed to margin performance in the quarter to be reported.
The world's largest manufacturer of heavy industrial equipment, Caterpillar Inc. (CAT - Free Report) , which is viewed as a bellwether for the global economy, reported fourth-quarter 2020 results on Jan 29. The bottom line declined 22% on a 15% drop in revenues on account of lower sales volume. This was primarily due to low end-user demand amid the coronavirus pandemic and the impact of changes in dealer inventories. The company’s cost cutting efforts somewhat mitigated the impact. Caterpillar, however, reported an improvement in fourth-quarter backlog and stated that it expects first-quarter 2021 results to come in higher reflecting stronger year-over-year sales to users and dealer restocking.
It will be interesting to see how some of the companies belonging to this sector fare when they release quarterly numbers on Feb 3.
W.W. Grainger, Inc. (GWW - Free Report) is scheduled to report fourth-quarter 2020 results before the opening bell. The company has surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice. It has a trailing four-quarter earnings surprise of 2.35%, on average.
W.W. Grainger, Inc. Price and EPS Surprise
W.W. Grainger, Inc. price-eps-surprise | W.W. Grainger, Inc. Quote
Per the Zacks quantitative model, 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. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our proven model does not conclusively predict an earnings beat for Grainger this time around. Grainger has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Grainger has been experiencing a surge in sales of personal protective equipment (PPE) and safety and cleaning products courtesy of higher customer demand in response to the coronavirus pandemic. This along with higher e-commerce sales might get reflected in fourth-quarter revenues. However, shift in demand toward lower-margin products and higher operating costs, negated by gains from the company’s ongoing cost control measures is likely to have impacted the to-be-reported quarter’s performance. (Read more: Grainger to Report Q4 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for Grainger’s fourth-quarter 2020 earnings is currently pegged at $3.78, which indicates a decline of 2.6% from the year-ago quarter. The estimate has remained stable over the past 30 days.
Avery Dennison Corporation (AVY - Free Report) is scheduled to report fourth-quarter 2020 results before the opening bell. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 12.8%.
Avery Dennison Corporation Price and EPS Surprise
Avery Dennison Corporation price-eps-surprise | Avery Dennison Corporation Quote
Avery Dennison currently has an Earnings ESP of -0.97% and a Zacks Rank of 2.
The company’s fourth-quarter overall sales are anticipated to reflect the impact of weak demand amid the pandemic. Nevertheless, the company is likely to have benefited from acquisitions and growth in high-value product categories during the October-December period. Avery Dennison has been executing various long-term productivity and temporary cost saving actions during the pandemic. This is likely to have driven margins and earnings in the quarter under review. (Read more: Avery Dennison to Report Q4 Earnings: What's in Store?)
The Zacks Consensus Estimate for the company’s fourth-quarter earnings has gone up 2% to $2.17 per share over the past 30 days. The figure suggests an improvement of 25% from the prior-year reported figure.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>