The third-quarter earnings season is in its final stretch, with more than 455 S&P 500 companies having already reported results till Nov 9. We notice that results in the third quarter have improved remarkably from the preceding quarters and would likely end up being in the optimistic territory after five repeated seasons of earnings decline for the benchmark index.
However, while estimating the performance of U.S.-based industrial stocks, we believe that factors like election-induced market instability, a strong U.S. dollar, weak energy resource prices, lackluster export numbers of China and the Brexit referendum might act as spoilsport.
Nevertheless, the time isn’t ripe to draw any concrete conclusion, as the actual results might hold surprises.
According to the Zacks Industry classification, the industrial stocks are broadly grouped under Industrial Products, one of the 16 Zacks sectors.
Below we briefly discuss the broader sectors’ earnings trend so far in the Jul-Sep 2016 quarter.
Our latest Earnings Trends article (released on Nov 9, 2016) reveals that roughly 95.7% of the Industrial stocks in the S&P 500 Group have reported results for the July-September quarter, recording 16.1% rise in earnings and 0.3% decline in revenues on a year-over-year basis. We predict that earnings of all the industrial stocks in the S&P 500 Group will increase 10.6% year over year. However, revenues are expected to inch up only 0.1% over the same time frame.
What Awaits these 3 Industrial Stocks?
Alarm.Com Holdings, Inc. (ALRM - Free Report) is slated to report third-quarter 2016 results after the market closes. The company’s average positive earnings surprise over the trailing four quarters is 450.56%. Our proven model does not conclusively show that Alarm.Com Holdings will beat estimates in this quarter. That 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 an earnings beat. That is not the case here as we will see below.
Alarm.Com Holdings’ Earnings ESP is 0.00%, as the Most Accurate estimate is in line with the Zacks Consensus Estimate of 10 cents. The company carries a favorable Zacks Rank #3, but when combined with an ESP of 0.00%, it makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Over the last seven days, the Zacks Consensus Estimate for the stock has remained stable at 10 cents.
ESCO Technologies Inc. (ESE - Free Report) is set to report its fourth-quarter fiscal 2016 (ended Sep 30, 2016) results after the market closes. The company’s average positive earnings surprise over the last four quarters is 15.68%. Our proven model does not conclusively show that ESCO Technologies will beat estimates in the quarter. This is because the company carries a Zacks Rank #3 and has an Earnings ESP of 0.00% (as the Most Accurate estimate is in line with the Zacks Consensus Estimate of 64 cents). Over the last seven days, the Zacks Consensus Estimate for the stock has remained constant at 64 cents.
HollySys Automation Technologies, Ltd. (HOLI - Free Report) will report its first-quarter fiscal 2017 (ended Sep 30, 2016) results before the market opens. The company’s average positive earnings surprise over the trailing four quarters is 6.06%. Our proven model does not conclusively show that HollySys Automation Technologies will beat estimates in this quarter. This is because, the company carries a Zacks Rank #3, but its Earnings ESP is 0.00% (as the Most Accurate estimate is in line with the Zacks Consensus Estimate of 53 cents). Over the last seven days, the Zacks Consensus Estimate for the stock has remained unchanged at 53 cents.
We caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions .
Confidential from Zacks
This week, Zacks researchers have named 7 other stocks that look to break out even sooner than today's Bull of the Day. You can see these time-sensitive tickers free, and access additional trades that are not available to the public. Simply click here>>