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Can Linde (LIN) Keep Its Earnings Surprise Streak Alive in Q2?

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Linde (LIN - Free Report) is expected to beat second-quarter 2021 earnings estimates when it reports results on Jul 30, before the opening bell.

In the last reported quarter, the leading producer of industrial gases reported earnings of $2.49 per share, beating the Zacks Consensus Estimate of $2.26 on higher pricing and volumes. Linde beat bottom-line estimates in the last four reported quarters, the average surprise being 10.5%. This is depicted in the graph below:

Linde plc Price and EPS Surprise

Linde plc Price and EPS Surprise

Linde plc price-eps-surprise | Linde plc Quote

Let’s see how things have shaped up prior to this announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter earnings per share of $2.51 has witnessed no downward revision and one upward revision in the past 30 days. The estimated figure suggests an improvement of 32.1% from the prior-year reported number.

The consensus estimate for second-quarter revenues of $7.4 billion indicates a 15.9% jump from the year-ago reported figure.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Linde this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company’s Earnings ESP is +1.59% as the Most Accurate Estimate of $2.55 per share is pegged higher than the Zacks Consensus Estimate of $2.51. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Linde currently sports a Zacks Rank #3.

Factors Driving the Better-Than-Expected Earnings

In comparison with the second quarter of 2020, industrial production in the United States has improved drastically in the June quarter of this year. The outperformance was owing to the reopening of the economy, thanks to the rolling out of coronavirus vaccines.

Being a leading global industrial gases and engineering company and majority of contributions coming from America, higher industrial production is likely to have aided the company’s bottom line. The Zacks Consensus Estimate for the company’s sales from Americas is pegged at $2,948 million, indicating an improvement from the year-ago quarter’s $2,417 million.

Other Stocks That Warrant a Look

Here are some other companies from the Basic Materials space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

AdvanSix (ASIX - Free Report) has an Earnings ESP of +21.30% and a Zacks Rank of 1. It is scheduled to report second-quarter results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avient Corporation (AVNT - Free Report) has an Earnings ESP of +2.47% and a Zacks Rank #2. The firm is scheduled to release earnings on Jul 30.

The Mosaic Company (MOS - Free Report) has an Earnings ESP of +0.26% and is a Zacks #3 Ranked player. The company is scheduled to release second-quarter results on Aug 2.

In-Depth Zacks Research for the Tickers Above

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The Mosaic Company (MOS) - free report >>

Linde plc (LIN) - free report >>

AdvanSix Inc. (ASIX) - free report >>

Avient Corporation (AVNT) - free report >>