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Stanley Black (SWK) to Report Q4 Earnings: What to Expect?

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Stanley Black & Decker, Inc. (SWK - Free Report) is scheduled to release fourth-quarter 2021 results on Feb 1, before market open.

The company delivered better-than-expected results in the last four quarters, the earnings surprise being 12.85%, on average. In the last reported quarter, the company’s earnings of $2.77 surpassed the Zacks Consensus Estimate of $2.47 by 12.15%.

In the past three months, shares of Stanley Black have lost 4.5% compared with the industry’s decline of 5.6%.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Let us delve deeper.

Key Factors & Estimates for Q4

Stanley Black’s fourth-quarter results are expected to reflect the benefits of its solid product offerings, and healthy demand in health and safety, electrification, and home & garden end markets. Investments to boost capacity, improvement in operating conditions and synergies from acquired assets are likely to have aided. Better manufacturing activities in the country, as evident from a 4% year-over-year increase in industrial production in the fourth quarter, is believed to have boosted businesses for industrial companies like Stanley Black.

Among segments, the performance of Tools & Storage and Security is expected to have been the driving factors in the quarter. Notably, the company predicts organic sales growth of low-20% for Tools & Storage and in the high-single digits for Security for 2021. Gains from margin resiliency, pricing actions, and other cost-control measures are predicted to have aided the quarter’s performance. Lower taxes are anticipated to have added to earnings growth.

On the flip side, the quarter’s results are likely to reflect the adverse impacts of cost inflation and supply-chain restrictions. For 2021, the company predicts commodity inflation, labor problems and transit issues to have an adverse impact of $690 million. Recording of certain costs related to the acquisitions of Excel Industries and MTD Holdings Inc. (completed in December) are likely to have diluted earnings in the quarter.

For 2021, Stanley Black predicts adjusted non-GAAP earnings of $10.70-$10.90 per share, below the previously mentioned $10.90-$11.10. The revision accounts for some changes that the company is making for calculating earnings per share. Per the revised projection, fourth-quarter earnings are pegged at $1.92-$2.12 per share.

The Zacks Consensus Estimate for Stanley Black’s revenues is pegged at $4,449 million for the fourth quarter of 2021, suggesting a 0.9% increase from the year-ago quarter’s reported number and 4.4% growth from the previous quarter’s reported figure. Earnings estimates are pegged at $2.06, indicating a decrease of 37.4% from the year-ago reported figure and a 25.6% fall from the previous quarter’s reported number.

On a segmental basis, the Zacks Consensus Estimate for the Tools & Storage segment’s revenues is pegged at $3,360 million, indicating a 3.1% increase from the year-ago reported figure and 5.5% growth sequentially. Then again, the estimate for Security’s revenues is pegged at $526 million, suggesting growth of 6.9% from the year-ago reported figure and an increase of 8.7% from the sequential figure.

The Zacks Consensus Estimate for Industrial’s fourth-quarter revenues is pegged at $605 million, suggesting a year-over-year decrease of 8.1% and sequential growth of 1.9%.

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 chances of beating estimates. This is exactly the case with Stanley Black as shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Stanley Black has an Earnings ESP of +1.37% as the Most Accurate Estimate of $2.09 is above the Zacks Consensus Estimate of $2.06.

Stanley Black & Decker, Inc. Price, Consensus and EPS Surprise

 

Stanley Black & Decker, Inc. Price, Consensus and EPS Surprise

Stanley Black & Decker, Inc. price-consensus-eps-surprise-chart | Stanley Black & Decker, Inc. Quote

Zacks Rank: Stanley Black currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies that you may want to consider as, according to our model, these too have the right combination of elements to beat on earnings this reporting cycle.

Sealed Air Corporation (SEE - Free Report) currently has an Earnings ESP of +1.75% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Sealed Air’s earnings is pegged at $1.14 per share for the fourth quarter of 2021. The company delivered better-than-expected results in three of the last four quarters, while lagging estimates once. The average earnings surprise for SEE is 6.54%.

AGCO Corporation (AGCO - Free Report) presently has an Earnings ESP of +25.42% and a Zacks Rank of 2.

For the fourth quarter of 2021, the Zacks Consensus Estimate for AGCO’s earnings has been decreased by 1.2% to $1.71 in the past 60 days. The company delivered better-than-expected results in the last four quarters, with an earnings surprise of 47.53%, on average.

Graco Inc. (GGG - Free Report) currently has an Earnings ESP of +0.22% and a Zacks Rank #2.

The Zacks Consensus Estimate for Graco’s earnings is pegged at 64 cents per share for the fourth quarter of 2021. It delivered better-than-expected results in three of the last four quarters, while lagging estimates once. The earnings surprise was 6.58%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.