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Machinery Stocks Q2 Earnings Slated on Aug 8: HY, MTW, DXPE
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The performance of machinery stocks last year was nothing worth writing home about, with adverse currency movements, weakening economic conditions, particularly in China, and multi-year-low commodity prices haunting the industry. The Machinery industry, which is broadly grouped under the Industrial Products sector (one of the 16 broad Zacks sectors), suffered an unceremonious 22.2% drop in earnings in first-quarter 2016.
The second-quarter 2016 does not paint an impressive picture either. In the sector, 95.5% of the companies have reported a 1.2% decline in earnings for the quarter. Considering all the companies that are yet to report, the sector’s earnings are expected to fall 4.9% in the quarter.
Looking at the projected estimates for the quarter, total S&P 500 earnings are expected to be down 3.1% on a 0.4% dip in revenues. We are looking at negative earnings projections for the 5th quarter in a row. Growth will be in the red for 7 of the 16 Zacks sectors, with the maximum drag from the Energy sector (read more: 4 Things to Know about the Q2 Earnings Season?).
Meanwhile, weak industrial production numbers – comprising output of the manufacturing, mining and utility sectors – add to the woes. Per the latest Federal Reserve report, industrial production inched up 0.6% in June, after edging down 0.3% in May. In the second quarter, industrial production suffered its third consecutive quarterly decline, falling at an annual rate of 1%. Industrial demand remained challenged in the quarter, hurt by weak global oil & gas markets. Capacity utilization has been decreasing, reflecting slow industrial capex spending.
While residential and commercial construction continue to be sources of strength, key markets for the machinery industry – such oil and gas, agriculture, and mining – are pulling the industry down, with no possibility of an improvement any time soon. The U.S. rig count currently stands at 414, down 47.3% from a year ago and is likely to dwindle even further, in tandem with plunging oil prices. Moreover, the U.S. Department of Agriculture estimates farm income to decline further this year. Persistent economic weakness in China has sucked the mining machinery industry into its vortex.
Keeping these headwinds in mind, it will be interesting to see how some of the machinery stocks fare in their upcoming releases on Aug 8, 2016. Apart from beats and misses, focus will also be on steps taken to overcome the headwinds as well as their outlook.
Hyster-Yale Materials Handling, Inc. (HY - Free Report) designs, engineers, manufactures, sells, and services a line of lift trucks and aftermarket parts in the United States and internationally. The company will report second-quarter results before market open on Aug 8.
In the last quarter, Hyster-Yale delivered a negative earnings surprise of 10.29%. Nevertheless, the stock has a positive average surprise of 5.71% over the trailing 4 quarters.
The overall global market is predicted to decline modestly in 2016. Market growth in EMEA is expected to be more than offset by declines in the Americas and JAPIC (operations in the Asia and Pacific regions, including China) markets. Despite these market conditions, unit shipments, revenues and parts sales are expected to increase in the remainder of 2016 compared with 2015. However, a strong U.S. dollar will continue to affect revenues and results.
Hyster-Yale has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00% which makes surprise prediction difficult.
The Manitowoc Company, Inc. (MTW - Free Report) – a leading global manufacturer of cranes and lift solutions – will also report second-quarter 2016 results on Aug 8, after market close.
In the prior quarter, Manitowoc posted a negative surprise of 33.33%. However, the stock has delivered an average positive surprise of 20.89% in the trailing 4 quarters.
Manitowoc continues to be hurt by weak demand, particularly in mobile cranes, and low oil prices. Even though the company will benefit from product innovation and launches and cost-reduction initiatives, reduced backlog remains a headwind.
Manitowoc has a Zacks Rank #4 (Sell), which along with a 0.00% ESP, makes an earnings beat unlikely this season.
DXP Enterprises, Inc. (DXPE - Free Report) , which engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services to industrial customers in the U.S, will report second-quarter results on Aug 8.
Last quarter, the company posted a negative earnings surprise of 488.89%. The company has a negative earnings surprise of 119.67% over the past four quarters.
Last quarter, DXP Enterprises faced headwinds from lower capital spending by its customers in the oil & gas industry due to choppy oil prices. Also, unfavorable foreign currency movements and its effect on export demand adversely affected the company’s top line. In the quarters ahead, though the negative influences of these headwinds are easing a bit, these can pose concerns for the company.
DXP Enterprises has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00% which makes surprise prediction difficult.
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Machinery Stocks Q2 Earnings Slated on Aug 8: HY, MTW, DXPE
The performance of machinery stocks last year was nothing worth writing home about, with adverse currency movements, weakening economic conditions, particularly in China, and multi-year-low commodity prices haunting the industry. The Machinery industry, which is broadly grouped under the Industrial Products sector (one of the 16 broad Zacks sectors), suffered an unceremonious 22.2% drop in earnings in first-quarter 2016.
The second-quarter 2016 does not paint an impressive picture either. In the sector, 95.5% of the companies have reported a 1.2% decline in earnings for the quarter. Considering all the companies that are yet to report, the sector’s earnings are expected to fall 4.9% in the quarter.
Looking at the projected estimates for the quarter, total S&P 500 earnings are expected to be down 3.1% on a 0.4% dip in revenues. We are looking at negative earnings projections for the 5th quarter in a row. Growth will be in the red for 7 of the 16 Zacks sectors, with the maximum drag from the Energy sector (read more: 4 Things to Know about the Q2 Earnings Season?).
Meanwhile, weak industrial production numbers – comprising output of the manufacturing, mining and utility sectors – add to the woes. Per the latest Federal Reserve report, industrial production inched up 0.6% in June, after edging down 0.3% in May. In the second quarter, industrial production suffered its third consecutive quarterly decline, falling at an annual rate of 1%. Industrial demand remained challenged in the quarter, hurt by weak global oil & gas markets. Capacity utilization has been decreasing, reflecting slow industrial capex spending.
While residential and commercial construction continue to be sources of strength, key markets for the machinery industry – such oil and gas, agriculture, and mining – are pulling the industry down, with no possibility of an improvement any time soon. The U.S. rig count currently stands at 414, down 47.3% from a year ago and is likely to dwindle even further, in tandem with plunging oil prices. Moreover, the U.S. Department of Agriculture estimates farm income to decline further this year. Persistent economic weakness in China has sucked the mining machinery industry into its vortex.
Keeping these headwinds in mind, it will be interesting to see how some of the machinery stocks fare in their upcoming releases on Aug 8, 2016. Apart from beats and misses, focus will also be on steps taken to overcome the headwinds as well as their outlook.
Hyster-Yale Materials Handling, Inc. (HY - Free Report) designs, engineers, manufactures, sells, and services a line of lift trucks and aftermarket parts in the United States and internationally. The company will report second-quarter results before market open on Aug 8.
HYSTER-YALE MAT Price and EPS Surprise
HYSTER-YALE MAT Price and EPS Surprise | HYSTER-YALE MAT Quote
In the last quarter, Hyster-Yale delivered a negative earnings surprise of 10.29%. Nevertheless, the stock has a positive average surprise of 5.71% over the trailing 4 quarters.
The overall global market is predicted to decline modestly in 2016. Market growth in EMEA is expected to be more than offset by declines in the Americas and JAPIC (operations in the Asia and Pacific regions, including China) markets. Despite these market conditions, unit shipments, revenues and parts sales are expected to increase in the remainder of 2016 compared with 2015. However, a strong U.S. dollar will continue to affect revenues and results.
Hyster-Yale has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00% which makes surprise prediction difficult.
The Manitowoc Company, Inc. (MTW - Free Report) – a leading global manufacturer of cranes and lift solutions – will also report second-quarter 2016 results on Aug 8, after market close.
MANITOWOC INC Price and EPS Surprise
MANITOWOC INC Price and EPS Surprise | MANITOWOC INC Quote
In the prior quarter, Manitowoc posted a negative surprise of 33.33%. However, the stock has delivered an average positive surprise of 20.89% in the trailing 4 quarters.
Manitowoc continues to be hurt by weak demand, particularly in mobile cranes, and low oil prices. Even though the company will benefit from product innovation and launches and cost-reduction initiatives, reduced backlog remains a headwind.
Manitowoc has a Zacks Rank #4 (Sell), which along with a 0.00% ESP, makes an earnings beat unlikely this season.
DXP Enterprises, Inc. (DXPE - Free Report) , which engages in distributing maintenance, repair, and operating (MRO) products, equipment, and services to industrial customers in the U.S, will report second-quarter results on Aug 8.
DXP ENTERPRISES Price and EPS Surprise
DXP ENTERPRISES Price and EPS Surprise | DXP ENTERPRISES Quote
Last quarter, the company posted a negative earnings surprise of 488.89%. The company has a negative earnings surprise of 119.67% over the past four quarters.
Last quarter, DXP Enterprises faced headwinds from lower capital spending by its customers in the oil & gas industry due to choppy oil prices. Also, unfavorable foreign currency movements and its effect on export demand adversely affected the company’s top line. In the quarters ahead, though the negative influences of these headwinds are easing a bit, these can pose concerns for the company.
DXP Enterprises has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00% which makes surprise prediction difficult.
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 >>