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The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings has remained stable in the past 60 days. The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 3.5%.
Let’s see how things have shaped up for Cintas’ fiscal third-quarter earnings.
Strong demand for products and services from the company’s health care, education and government sectors is expected to drive its Uniform Rental and Facility Services segment’s performance in the fiscal third-quarter. Also, improving operational productivity and new product launches within the segment are likely to have been beneficial. We expect segmental revenues to increase 7% from the year-ago levels in the quarter under discussion.
Strength across its health and wellness businesses and high customer retention levels are expected to have driven performance of the First Aid and Safety Services segment. We expect this segment’s revenues to increase 10.4% from the year-ago reported number.
Strong growth across the uniform direct sale and fire protection services has been driving the performance of All-Other business. Our estimate for the segment’s quarterly revenues implies a 15.7% growth from the year-ago reported number.
Cintas is expected to have put up a healthy margin performance in the to-be-reported quarter, supported by its focus on operational executions and pricing actions. We expect the company’s fiscal third-quarter operating margin to improve 30 basis points from the prior-year levels.
However, CTAS has been witnessing escalating cost of sales, and selling, general and administrative (SG&A) expenses, which are likely to weigh on its bottom-line results. For the quarter under review, we anticipate SG&A expenses to rise 9% from the year-earlier levels. Also, given the company’s exposure to international markets, foreign currency headwinds might affect the top-line results.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Cintas 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, but that’s not the case here, as elaborated below.
CTAS has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and Most Accurate Estimate is pegged at $3.56. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Cintas reported second-quarter fiscal 2024 (ended Nov 30, 2023) earnings of $3.61 per share, which beat the Zacks Consensus Estimate of $3.48. The bottom line increased 15.7% year over year despite high costs.
Total revenues of $2,377.2 million outperformed the Zacks Consensus Estimate of $2,336 million. The top line climbed 9.3% year over year driven by higher segmental revenues. Organic sales were also up 9% year over year.
Performance of Other Industrial Companies
A. O. Smith Corporation’s (AOS - Free Report) fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year. Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year. The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year.
Nordson Corporation (NDSN - Free Report) reported first-quarter fiscal 2024 (ended Jan 31, 2024) adjusted earnings of $2.21 per share, surpassing the Zacks Consensus Estimate of $2.03. The bottom line increased 13.3% year over year. The company’s revenues of $633.2 million surpassed the consensus estimate of $630 million. The top line grew 3.7% year over year.
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Cintas (CTAS) to Report Q3 Earnings: What's in the Cards?
Cintas Corporation (CTAS - Free Report) is scheduled to release third-quarter fiscal 2024 (ended Feb 29, 2024) results on Mar 27, before market open.
The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings has remained stable in the past 60 days. The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 3.5%.
Let’s see how things have shaped up for Cintas’ fiscal third-quarter earnings.
Cintas Corporation Price and EPS Surprise
Cintas Corporation price-eps-surprise | Cintas Corporation Quote
Factors to Note
Strong demand for products and services from the company’s health care, education and government sectors is expected to drive its Uniform Rental and Facility Services segment’s performance in the fiscal third-quarter. Also, improving operational productivity and new product launches within the segment are likely to have been beneficial. We expect segmental revenues to increase 7% from the year-ago levels in the quarter under discussion.
Strength across its health and wellness businesses and high customer retention levels are expected to have driven performance of the First Aid and Safety Services segment. We expect this segment’s revenues to increase 10.4% from the year-ago reported number.
Strong growth across the uniform direct sale and fire protection services has been driving the performance of All-Other business. Our estimate for the segment’s quarterly revenues implies a 15.7% growth from the year-ago reported number.
Cintas is expected to have put up a healthy margin performance in the to-be-reported quarter, supported by its focus on operational executions and pricing actions. We expect the company’s fiscal third-quarter operating margin to improve 30 basis points from the prior-year levels.
However, CTAS has been witnessing escalating cost of sales, and selling, general and administrative (SG&A) expenses, which are likely to weigh on its bottom-line results. For the quarter under review, we anticipate SG&A expenses to rise 9% from the year-earlier levels. Also, given the company’s exposure to international markets, foreign currency headwinds might affect the top-line results.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Cintas 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, but that’s not the case here, as elaborated below.
CTAS has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and Most Accurate Estimate is pegged at $3.56. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CTAS has a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Highlights of Q2 Earnings
Cintas reported second-quarter fiscal 2024 (ended Nov 30, 2023) earnings of $3.61 per share, which beat the Zacks Consensus Estimate of $3.48. The bottom line increased 15.7% year over year despite high costs.
Total revenues of $2,377.2 million outperformed the Zacks Consensus Estimate of $2,336 million. The top line climbed 9.3% year over year driven by higher segmental revenues. Organic sales were also up 9% year over year.
Performance of Other Industrial Companies
A. O. Smith Corporation’s (AOS - Free Report) fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year. Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year. The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year.
Nordson Corporation (NDSN - Free Report) reported first-quarter fiscal 2024 (ended Jan 31, 2024) adjusted earnings of $2.21 per share, surpassing the Zacks Consensus Estimate of $2.03. The bottom line increased 13.3% year over year. The company’s revenues of $633.2 million surpassed the consensus estimate of $630 million. The top line grew 3.7% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.