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Encore Wire (WIRE) to Report Q4 Earnings: What's in Store?
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Encore Wire Corporation (WIRE - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 15, after market close.
The company delivered an earnings surprise of 271.03%, on average, in the trailing four quarters, beating estimates on all occasions. Encore Wire’s third-quarter 2021 adjusted earnings of $8.51 per share surpassed the Zacks Consensus Estimate of $2.82 by 201.77%.
Image Source: Zacks Investment Research
In the past three months, shares of the company have lost 19.1% compared with the industry’s decline of 2.4%.
Key Factors to Note
Solid demand for electrical building wire across Encore Wire’s commercial and industrial end markets is likely to have driven its performance in the fourth quarter. An increase in the shipment volume for copper and aluminum wire, supported by higher prices, is likely to have augmented the company’s top-line performance. Also, strength in its residential end market, driven by healthy construction activities, is likely to have been beneficial in the quarter.
The company’s focus on product innovation and operational execution, along with its investments in manufacturing capacity and strong backlog level, are likely to have been tailwinds. Encore Wire’s vertically integrated business model, coupled with its focus on cost-control measures, and effective pricing actions, is also expected to have helped it maintain a healthy margin performance in the to-be-reported quarter.
However, supply-chain challenges and disruptions in the company’s distribution network are likely to have dragged its performance in the fourth quarter. Cost inflation and the shortage of skilled labor are expected to have adversely impacted the company’s margins and profitability in the fourth quarter.
High capital expenditure incurred is anticipated to have been a spoilsport. The company expects to incur $115-$125 million for 2021. This is likely to have affected its earnings in the quarter under review.
The consensus estimate for the company’s fourth-quarter earnings is pegged at $2.42, suggesting a decline of 71.6% sequentially but an increase of 106.8% from the year-ago quarter’s reported figure.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The company has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at $2.42.
Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Zacks Consensus Estimate for Middleby’s earnings is pegged at $2.07 per share for the fourth quarter of 2021. MIDD’s shares have gained 6.2% in the past three months.
Chart Industries, Inc. (GTLS - Free Report) has an Earnings ESP of +6.45% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for Chart Industries’ earnings is pegged at 67 cents per share for fourth-quarter 2021. GTLS’ shares have lost 36.4% in the past three months.
Sealed Air Corporation (SEE - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank of 2, currently.
The Zacks Consensus Estimate for Sealed Air’s earnings is pegged at $1.14 per share for the fourth quarter of 2021. SEE’s shares have lost 0.4% in the past three months.
Image: Bigstock
Encore Wire (WIRE) to Report Q4 Earnings: What's in Store?
Encore Wire Corporation (WIRE - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 15, after market close.
The company delivered an earnings surprise of 271.03%, on average, in the trailing four quarters, beating estimates on all occasions. Encore Wire’s third-quarter 2021 adjusted earnings of $8.51 per share surpassed the Zacks Consensus Estimate of $2.82 by 201.77%.
In the past three months, shares of the company have lost 19.1% compared with the industry’s decline of 2.4%.
Key Factors to Note
Solid demand for electrical building wire across Encore Wire’s commercial and industrial end markets is likely to have driven its performance in the fourth quarter. An increase in the shipment volume for copper and aluminum wire, supported by higher prices, is likely to have augmented the company’s top-line performance. Also, strength in its residential end market, driven by healthy construction activities, is likely to have been beneficial in the quarter.
The company’s focus on product innovation and operational execution, along with its investments in manufacturing capacity and strong backlog level, are likely to have been tailwinds. Encore Wire’s vertically integrated business model, coupled with its focus on cost-control measures, and effective pricing actions, is also expected to have helped it maintain a healthy margin performance in the to-be-reported quarter.
However, supply-chain challenges and disruptions in the company’s distribution network are likely to have dragged its performance in the fourth quarter. Cost inflation and the shortage of skilled labor are expected to have adversely impacted the company’s margins and profitability in the fourth quarter.
High capital expenditure incurred is anticipated to have been a spoilsport. The company expects to incur $115-$125 million for 2021. This is likely to have affected its earnings in the quarter under review.
The consensus estimate for the company’s fourth-quarter earnings is pegged at $2.42, suggesting a decline of 71.6% sequentially but an increase of 106.8% from the year-ago quarter’s reported figure.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The company has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at $2.42.
Encore Wire Corporation Price and EPS Surprise
Encore Wire Corporation price-eps-surprise | Encore Wire Corporation Quote
Zacks Rank: Encore Wire carries a Zacks Rank #3.
Key Picks
Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Middleby Corporation (MIDD - Free Report) has an Earnings ESP of +3.18% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Middleby’s earnings is pegged at $2.07 per share for the fourth quarter of 2021. MIDD’s shares have gained 6.2% in the past three months.
Chart Industries, Inc. (GTLS - Free Report) has an Earnings ESP of +6.45% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for Chart Industries’ earnings is pegged at 67 cents per share for fourth-quarter 2021. GTLS’ shares have lost 36.4% in the past three months.
Sealed Air Corporation (SEE - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank of 2, currently.
The Zacks Consensus Estimate for Sealed Air’s earnings is pegged at $1.14 per share for the fourth quarter of 2021. SEE’s shares have lost 0.4% in the past three months.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.