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What's in Store for Aegion (AEGN) this Earnings Season?

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Aegion Corporation (AEGN - Free Report) is scheduled to release second-quarter 2017 results on Aug 1, after the market closes.

Last quarter, Aegion missed earnings expectations by 5.26%. In the last four reported quarters, it surpassed earnings estimates on one occasion and missed in the other three. Nevertheless, the company recorded an average positive earnings surprise of 1.26%.

Aegion’s share price movement shows that the stock has outperformed the industry’s share price performance in the past one year. Specifically, the stock has rallied 14.56% during this period, while the industry gained 10.39%.

Let’s see how things are shaping up for this quarter.

Aegion Corp Price and EPS Surprise


Aegion Corp Price and EPS Surprise | Aegion Corp Quote

Factors Influencing Q2

Higher raw material cost and a tighter market for U.S. construction labor, which will put pressure on wages, are expected to thwart margins in the second quarter. While these costs are being passed on to the market on current big bids, the margins in backlog could be affected.

Moreover, Aegion’s results will be hurt by challenges in the Canadian upstream oil market due to low oil and gas prices, and rising interest expenses. Despite these hurdles, consistent focus on labor utilization, project management and optimization of the fundamental business processes will drive results in the quarter to be reported.

Earnings Whispers

Our proven model does not conclusively show that Aegion will likely 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 at least 3 (Hold) for this to happen. However, that is not the case here, as you will see below.

Zacks ESP: Aegion’s Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 42 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Aegion currently carries a Zacks Rank #3. Although the company’s rank is favorable, the 0.00% ESP makes surprise prediction difficult.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some stocks you may want to consider, as according to our model these have the right combination of elements to post an earnings beat this quarter.

AGCO Corporation (AGCO - Free Report) , with an Earnings ESP of +2.89% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deere & Company (DE - Free Report) , with an Earnings ESP of +5.32% and a Zacks Rank #1.

AptarGroup, Inc. (ATR - Free Report) , with an Earnings ESP of +2.06% and a Zacks Rank #2.

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