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Barnes (B) Set to Report Q1 Earnings: What's in the Offing?

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Barnes Group Inc. (B - Free Report) is set to release first-quarter 2018 results on Apr 27, before the market opens.

The machinery company delivered better-than-expected results in three of the last four reported quarters while lagged estimates in one. Average earnings surprise for the four reported quarters is a positive 8.95%. In the last reported quarter, Barnes Group’s earnings of 71 cents per share were above the Zacks Consensus Estimate of 68 cents.

In the last month, the company’s shares yielded 1% return, outperforming 4.8% decline recorded by the industry it belongs to.

Let us see how things are shaping up for Barnes Group this quarter.

Factors to Affect Q1 Results

Barnes Group’s exposure to various end-markets, as well as its efforts to provide high-quality industrial technologies and engineered products to its vast customer base, will continue to be beneficial in the first quarter and quarters ahead. A solid backlog of approximately $1 billion at the end of 2017 point toward healthy demand for its products and services offered under the Industrial and Aerospace segments.

Though no specific financial guidance has been provided for the first-quarter 2018, Barnes Group’s expectation for the full year will give a rough idea of the factors that might have influenced first-quarter results.

For the Industrial segment, growth in demand for front runners in Europe and Asia is anticipated to be healthy on the back of the launch of an automotive program during the year. This along with healthy mold demand in personal care and medical end markets, as well as synergistic gains from FOBOHA acquisition, will drive results for the Molding Solutions business. Also, solid tool and die market worldwide is expected to be a boon for the Nitrogen Gas Products, especially in the first half of the year. The Engineered Components business stands to gain from rise in the projection for automotive production globally, partially offset by softness in the North American market.

On a broader note, we believe that healthy growth in the country’s industrial production in the first quarter of 2018, expanding manufacturing sector, strengthening housing markets and rise in new orders for U.S.-made machinery will be a boon for industrial companies. Also, aging population requiring medical attention, governmental spending on infrastructure development and better operating conditions in international markets served will be advantageous.

In the last four reported quarters, the surprise history of the Industrial segment was impressive, with an average positive sales surprise of 5.94%. First-quarter sales are projected to be $243 million, above $227 million that has been generated in the year-ago quarter.

For the Aerospace segment, a solid number of aircraft deliveries is anticipated in 2018 while growing requirement of aftermarket services and spare parts is anticipated to be advantageous. Rising air travel by the middle class and the need for better and innovative products and solutions by original equipment manufacturers (OEM) of aircraft will support the business.

In the last four reported quarters, the Aerospace segment’s average sales surprise was a positive 3.9%. First-quarter sales are estimated to be $121 million, above $114 million generated in the year-ago quarter.

On the flip side, industry competition, delays or difficulties in research and development of products and technologies, inflation in input price or supply shortage and adversaries arising from businesses in international arenas might temper the growth momentum.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The case with Barnes Group is given below.

Zacks ESP: Earnings ESP of Barnes Group is currently 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 67 cents.

Barnes Group, Inc. Price and EPS Surprise

Barnes Group, Inc. Price and EPS Surprise | Barnes Group, Inc. Quote


Zacks Rank: Barnes Group currently carries a Zacks Rank #3.

Note that we caution against stocks with 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 in the industry that you may want to consider as they have the right combination of elements to post an earnings beat this quarter, according to our model.

Graco Inc. (GGG - Free Report) has an Earnings ESP of +0.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

IDEX Corporation (IEX - Free Report) has an Earnings ESP of +0.41% and a Zacks Rank #2.

Nordson Corporation (NDSN - Free Report) has an Earnings ESP of +0.12% and a Zacks Rank #3.

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