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Tech Stocks to Watch for Earnings on May 4: MTD, PKI & More
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The first-quarter earnings season is past the halfway mark. In fact, the majority of the S&P 500 members will complete reporting by the end of this week (82.8% of the index’s total membership).
Picture Emerging Thus Far
As per the latest Earnings Preview, as of Apr 28, 288 S&P 500 members, representing 63.8% of the index’s total market capitalization, have already reported quarterly numbers. Total earnings of these companies are up 13.7% on a year-over-year basis (76.4% of the companies beat EPS estimates) while total revenue is up 8.2% (68.1% of the companies beat top-line estimates).
Notably, earnings and revenue growth numbers have been significantly better than investors’ expectations so far, primarily due to robust results from technology, industrial products, basic materials and energy sectors.
Overall first-quarter earnings for S&P 500 companies are anticipated to be up 11.2% from the year-ago quarter on revenues that are estimated to increase 6.2%. This would be better than 7.4% growth in fourth-quarter earnings on 4.8% higher revenues.
Technology Earnings Soar
Investors seem to be rejoicing as most of the companies in the technology sector surpassed estimates last week, particularly revenue estimates. Also, growth rate is up from the preceding quarter and is on track to reach its highest level in almost three years. Continuation of these trends through the rest of this earnings season should serve as a reassuring development for the market.
We note that almost 57.4% of the total market capitalization in the technology sector has reported till now. Total earnings are up 17.7% on a year-over-year basis (80% of the companies beat EPS estimates) while total revenue is up 6.2% on a year-over-year basis (73.3% of the companies beat top-line estimates).
Earnings for the technology sector are anticipated to be up 13.9% on the back of 6.1% higher revenues, driven by strong broad-based growth.
Earnings Releases on May 4
Let’s take a sneak peek into four technology companies that are set to report their quarterly earnings on May 4:
Worldwide analytical instruments provider Mettler-Toledo International Inc. (MTD - Free Report) looks likely to beat first-quarter 2017 estimates as it has a favorable combination of a Zacks Rank #2 (Buy) and an Earnings ESP of +0.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) to beat earnings. You can see the complete list of today’s Zacks #1 Rank stocks here.
Interestingly, Mettler-Toledo’s results compared favorably with the Zacks Consensus Estimate in all of the last four quarters with an average positive surprise of 3.4%.
Mettler-Toledo International, Inc. Price and EPS Surprise
Similarly, global technology company PerkinElmer, Inc.’s Zacks Rank #3 and an Earnings ESP of +1.85% increases its odds of an earnings surprise when it reports first-quarter 2017.
PerkinElmer’s track record has been quite impressive, with the company comfortably beating estimates in three of the trailing four quarters, at an average of 2.7%.
However, we don’t expect manufacturer of innovative optical and photonic products Lumentum Holdings Inc. (LITE - Free Report) to post a surprise when it reports third-quarter fiscal 2017 results.
This is because the company’s Earnings ESP of 0.00% complicates our surprise prediction in spite of its favorable Zacks Rank #3.
The company’s surprise history, however, is impressive as it beat estimates in three of the last four quarters with an average positive beat of 17.27%.
We caution against provider of water quality and water regulation and control products Watts Water Technologies, Inc. (WTS - Free Report) when it reports first-quarter 2017. This is because it has a unfavorable combination of a Zacks Rank #4 (Sell) and Earnings ESP of -1.64.
We actually don’t recommend Zacks Rank #4 or 5 (Strong Sell) stocks going into the earnings announcement especially when the company is seeing negative estimate revisions.
Watts Water Technologies, Inc. Price and EPS Surprise
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Image: Bigstock
Tech Stocks to Watch for Earnings on May 4: MTD, PKI & More
The first-quarter earnings season is past the halfway mark. In fact, the majority of the S&P 500 members will complete reporting by the end of this week (82.8% of the index’s total membership).
Picture Emerging Thus Far
As per the latest Earnings Preview, as of Apr 28, 288 S&P 500 members, representing 63.8% of the index’s total market capitalization, have already reported quarterly numbers. Total earnings of these companies are up 13.7% on a year-over-year basis (76.4% of the companies beat EPS estimates) while total revenue is up 8.2% (68.1% of the companies beat top-line estimates).
Notably, earnings and revenue growth numbers have been significantly better than investors’ expectations so far, primarily due to robust results from technology, industrial products, basic materials and energy sectors.
Overall first-quarter earnings for S&P 500 companies are anticipated to be up 11.2% from the year-ago quarter on revenues that are estimated to increase 6.2%. This would be better than 7.4% growth in fourth-quarter earnings on 4.8% higher revenues.
Technology Earnings Soar
Investors seem to be rejoicing as most of the companies in the technology sector surpassed estimates last week, particularly revenue estimates. Also, growth rate is up from the preceding quarter and is on track to reach its highest level in almost three years. Continuation of these trends through the rest of this earnings season should serve as a reassuring development for the market.
We note that almost 57.4% of the total market capitalization in the technology sector has reported till now. Total earnings are up 17.7% on a year-over-year basis (80% of the companies beat EPS estimates) while total revenue is up 6.2% on a year-over-year basis (73.3% of the companies beat top-line estimates).
Earnings for the technology sector are anticipated to be up 13.9% on the back of 6.1% higher revenues, driven by strong broad-based growth.
Earnings Releases on May 4
Let’s take a sneak peek into four technology companies that are set to report their quarterly earnings on May 4:
Worldwide analytical instruments provider Mettler-Toledo International Inc. (MTD - Free Report) looks likely to beat first-quarter 2017 estimates as it has a favorable combination of a Zacks Rank #2 (Buy) and an Earnings ESP of +0.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) to beat earnings. You can see the complete list of today’s Zacks #1 Rank stocks here.
Interestingly, Mettler-Toledo’s results compared favorably with the Zacks Consensus Estimate in all of the last four quarters with an average positive surprise of 3.4%.
Mettler-Toledo International, Inc. Price and EPS Surprise
Mettler-Toledo International, Inc. Price and EPS Surprise | Mettler-Toledo International, Inc. Quote
Similarly, global technology company PerkinElmer, Inc.’s Zacks Rank #3 and an Earnings ESP of +1.85% increases its odds of an earnings surprise when it reports first-quarter 2017.
PerkinElmer’s track record has been quite impressive, with the company comfortably beating estimates in three of the trailing four quarters, at an average of 2.7%.
PerkinElmer, Inc. Price and EPS Surprise
PerkinElmer, Inc. Price and EPS Surprise | PerkinElmer, Inc. Quote
However, we don’t expect manufacturer of innovative optical and photonic products Lumentum Holdings Inc. (LITE - Free Report) to post a surprise when it reports third-quarter fiscal 2017 results.
This is because the company’s Earnings ESP of 0.00% complicates our surprise prediction in spite of its favorable Zacks Rank #3.
The company’s surprise history, however, is impressive as it beat estimates in three of the last four quarters with an average positive beat of 17.27%.
Lumentum Holdings Inc. Price and EPS Surprise
Lumentum Holdings Inc. Price and EPS Surprise | Lumentum Holdings Inc. Quote
We caution against provider of water quality and water regulation and control products Watts Water Technologies, Inc. (WTS - Free Report) when it reports first-quarter 2017. This is because it has a unfavorable combination of a Zacks Rank #4 (Sell) and Earnings ESP of -1.64.
We actually don’t recommend Zacks Rank #4 or 5 (Strong Sell) stocks going into the earnings announcement especially when the company is seeing negative estimate revisions.
Watts Water Technologies, Inc. Price and EPS Surprise
Watts Water Technologies, Inc. Price and EPS Surprise | Watts Water Technologies, Inc. Quote
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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