The earnings season is in full swing with about 183 S&P 500 companies reporting this week. About 97 S&P 500 companies have already released their results till Jul 21, reconfirming broad-based expectations of better-than-expected earnings. Total earnings for these 97 companies (accounting for 28.1% of the index’s total market capitalization) are up 8.4% year over year on 5.1% higher revenues, with 78.4% beating earnings estimates and 72.2% surpassing top-line expectations. Based on the hitherto observed pattern, the Apr–Jun 2017 quarter is anticipated to register high single-digit percentage earnings growth on a year-over-year basis.
Per the latest Earnings Preview, overall earnings for all the S&P 500 companies are expected to be up 8.6% on 4.7% growth in revenues. Although it represents a slightly tempered growth projection compared with the double-digit growth rate of the previous quarter, the dollar amount of the total earnings is likely to be on par or even better than the all-time high achieved in fourth-quarter 2016. The relative improvement in the quarterly performance is largely due to a turnaround in the economy, better job market scenario and rising oil prices. Experts widely believe that earnings growth is likely to be in double digits in 2018 and beyond.
For the April–June quarter as a whole, about five of the 16 Zacks sectors are expected to witness an earnings decline, with Autos, Conglomerates and Utilities being the biggest drag.
The Industrial Products sector appears reasonably healthy. For the sector, earnings are expected to improve 14.2% year over year while sales are touted to rise 12.9% due to thrust on the manufacturing industries.
Let’s have a sneak peek at three major Industrial Products stocks scheduled to report earnings tomorrow to see how things are shaping up for the upcoming results.
Ingersoll-Rand Plc (IR - Free Report) is scheduled to report second-quarter 2017 results before the opening bell. The company is focusing on improving efficiencies and capabilities of products and services within its core businesses after the divesture of the commercial and residential security businesses. Strategic acquisitions have served as growth drivers, supplementing the company’s organic growth. Furthermore, Ingersoll is likely to achieve steady improvements in operating profitability with new product developments, investments in IT platform and enhancement of channel services footprint and product management capabilities. (Read more: What's in Store for Ingersoll this Earnings Season?)
In the second quarter, the company’s earnings are expected to rise 5.6% year over year on 2.8% higher revenues. For the impending quarter, the company has an Earnings ESP of 0.00%, and Zacks Rank #3 (Hold), making an earnings prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 for a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Rockwell Automation Inc. (ROK - Free Report) is slated to report third-quarter fiscal 2017 results before the opening bell. The company’s performance is likely to be backed by consistent growth in the consumer and transportation verticals. Rockwell also anticipates heavy industries to grow despite the prevailing softness in oil and gas, and mining. Increased investments, acquisitions and product launches will likely drive results in the quarter to be reported. We remain reasonably certain on an earnings beat this quarter as it has an Earnings ESP of +0.61% and a Zacks Rank #3. (Read More: Rockwell Automation Q3 Earnings: What's in the Cards?)
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Graco Inc. (GGG - Free Report) will report second-quarter 2017 results after the closing bell. The company expects improvement in profitability on the back of healthy business in the Industrial, Process and Contractor segments, driven by better pricing and higher production volumes. We remain reasonably certain on an earnings beat this quarter as it has an Earnings ESP of +2.83% and a Zacks Rank #3.
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