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Eaton (ETN) to Post Q2 Earnings: What to Expect for the Stock

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Eaton Corporation (ETN - Free Report) is scheduled to release second-quarter 2021 earnings on Aug 3, before market open. This power management company delivered an earnings surprise of 16.8% in the last four quarters, on average.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

Eaton’s second-quarter earnings are likely to have benefited from lower shares outstanding compared with the last-year levels. The rollout of vaccines and an improvement in end-market conditions are expected to have increased demand for its products and boosted earnings.

Eaton completed the acquisition of Tripp Lite, Green Motion and a 50% stake in HuanYu High Tech at the end of the first quarter. Synergies drawn from these acquired assets are expected to have contributed to earnings in the second quarter .The company’s June-quarter numbers are also expected to have gained from its cost-savings initiatives and the ongoing restructuring program.

Expectation

Eaton’s second-quarter earnings are expected in the range of $1.45-$1.55 per share. It now expects organic revenue growth in the range of 24-28%. The company also anticipates a positive currency translation to add 2% to its second-quarter earnings. Segment operating margin is expected in the range of 17.5-17.9% for the quarter.

The Zacks Consensus Estimate for the second-quarter bottom line is pegged at $1.55 per share, indicating a 121.4% increase from the prior-year quarter’s reported figure.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Eaton 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, which is the case here as you will see below.
 

Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC price-eps-surprise | Eaton Corporation, PLC Quote

Earnings ESP: Eaton has an Earnings ESP of +2.17%. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Zacks Rank: Currently, Eaton carries a Zacks Rank #2. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Investors can also consider the following players from the same  sector that have the right combination of elements to beat on earnings in the upcoming releases.

Regal Beloit Corporation  (RBC - Free Report) is likely to come up with an earnings beat when it reports second-quarter results on Jul 28 after the market closes. It has an Earnings ESP of +1.47% and a Zacks Rank of 2 at present.

Illinois Tool Works Inc. (ITW - Free Report)   is likely to deliver an earnings beat when it reports second-quarter results on Jul 30. It has an Earnings ESP of +1.98% and a Zacks Rank #3, currently.

Kennametal Inc. (KMT - Free Report) is likely to pull off an earnings beat when it reports fourth-quarter fiscal 2021 earnings on Aug 2 after the market closes. It has an Earnings ESP of +6.78% and a Zacks Rank of 2, presently.