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Aegion (AEGN) Q2 Earnings: Will It Disappoint Investors?
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Aegion Corporation is set to report second-quarter 2016 results on Aug1, after the market closes. Aegion posted a year-over-year decline in both earnings and sales in first-quarter 2016. Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model does not conclusively show that Aegion is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below:
Zacks ESP: Aegion has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 25 cents.
Zacks Rank: Aegion’s Zacks Rank #3 combined with earnings ESP of 0.00% makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
Last quarter, Aegion posted a positive earnings surprise of 50%. Notably, the company has delivered an average positive earnings surprise of 15.14% over the trailing four quarters.
Aegion is poised to benefit from stable conditions across its end markets. Rising order pattern and backlog for Infrastructure Solutions and Corrosion Protection's midstream market, as well as progress on cost-reduction initiatives and the schedule to start the Appomattox project, will also drive growth. However, soft oil prices are expected to remain a headwind.
Per its recently announced restructuring plan, the company expects to trim headcount by approximately 900 employees, or 14.5% of the total workforce. Headcount reductions totaled 705 as of Mar 31, 2016. Aegion expects to substantially complete the restructuring in second-quarter 2016 and record total estimated pre-tax charges of $11–$13 million, most of which will be cash charges. This is an improvement from the original estimate of $7–$9 million. These charges may hurt earnings.
Stocks to Consider
Here are some companies in the construction sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat:
Allegion Plc (ALLE - Free Report) with an Earnings ESP of +2.25% and a Zacks Rank #2.
Harsco Corp. with an Earnings ESP of +38.46 and a Zacks Rank #1.
Ingersoll-Rand Plc (IR - Free Report) with an Earnings ESP of +0.77% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Aegion (AEGN) Q2 Earnings: Will It Disappoint Investors?
Aegion Corporation is set to report second-quarter 2016 results on Aug1, after the market closes. Aegion posted a year-over-year decline in both earnings and sales in first-quarter 2016. Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model does not conclusively show that Aegion is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below:
Zacks ESP: Aegion has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 25 cents.
Zacks Rank: Aegion’s Zacks Rank #3 combined with earnings ESP of 0.00% makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
Last quarter, Aegion posted a positive earnings surprise of 50%. Notably, the company has delivered an average positive earnings surprise of 15.14% over the trailing four quarters.
AEGION CORP Price and EPS Surprise
AEGION CORP Price and EPS Surprise | AEGION CORP Quote
Factors to Consider
Aegion is poised to benefit from stable conditions across its end markets. Rising order pattern and backlog for Infrastructure Solutions and Corrosion Protection's midstream market, as well as progress on cost-reduction initiatives and the schedule to start the Appomattox project, will also drive growth. However, soft oil prices are expected to remain a headwind.
Per its recently announced restructuring plan, the company expects to trim headcount by approximately 900 employees, or 14.5% of the total workforce. Headcount reductions totaled 705 as of Mar 31, 2016. Aegion expects to substantially complete the restructuring in second-quarter 2016 and record total estimated pre-tax charges of $11–$13 million, most of which will be cash charges. This is an improvement from the original estimate of $7–$9 million. These charges may hurt earnings.
Stocks to Consider
Here are some companies in the construction sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat:
Allegion Plc (ALLE - Free Report) with an Earnings ESP of +2.25% and a Zacks Rank #2.
Harsco Corp. with an Earnings ESP of +38.46 and a Zacks Rank #1.
Ingersoll-Rand Plc (IR - Free Report) with an Earnings ESP of +0.77% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>