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What Lies Ahead for Black Diamond (BDE) this Earnings Season?

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Black Diamond, Inc. is scheduled to report second-quarter 2017 numbers on Aug 7, after market close.

Last quarter, this manufacturer and distributor of outdoor recreation equipment and active lifestyle products, posted in-line earnings. Menawhile, the company’s trailing four-quarter average positive earnings surprise is 29.17%.

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

Black Diamond, Inc. Price and EPS Surprise

 

Black Diamond, Inc. Price and EPS Surprise | Black Diamond, Inc. Quote

Factors Likely to Influence Q2 Results

Healthy demand for each of the company’s different product categories for climbing, mountaineering and skiing across all geographic regions, particularly in North America, might drive the top line in the second quarter.

Moreover, this sporting goods company’s strategies like streamlining of manufacturing processes and overhead cost reduction are expected to boost the quarter’s performance. Meanwhile, increased investments in marketing campaigns is strengthening brand equity and translating into strong bookings for fall 2017. This coupled with product innovation are likely to further propel the quarterly results.

Black Diamond’s independent global distributor business is also likely to experience growth in the quarter, particularly in the large Asian markets. In fact, a strong load of preseason orders facilitated by improved availability of products, and efforts to encourage distributors to increase the company’s brand presence within retailers are expected to be driving factors.

However, negative currency translations may impact sales and gross margin in the to-be-reported quarter. In addition, higher costs associated with strategic initiatives might further impact gross margin. Meanwhile, a tough retail environment may keep revenues under pressure.

Earnings Whispers

Our proven model does not conclusively show earnings beat for Black Diamond 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 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: Black Diamond has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 2 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Black Diamond has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

Notably, 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 to Consider

Here are some companies to consider in the Consumer Discretionary sector as our model shows they have the right combination of elements to post an earnings beat this quarter:

Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) has an Earnings ESP of +1.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eldorado Resorts, Inc. (ERI - Free Report) has an Earnings ESP of +12.00% and a Zacks Rank #3.

Nexstar Media Group, Inc. (NXST - Free Report) has an Earnings ESP of +1.09% and a Zacks Rank #3.

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