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Cintas (CTAS) to Post Q4 Earnings: Another Beat in Store?

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Cintas Corporation (CTAS - Free Report) is slated to report fourth-quarter fiscal 2018 results (ended May 2018) on Jul 19, after the market closes.

The company pulled off an average positive earnings surprise of 9.61% over the preceding four quarters. Notably, its adjusted earnings of $1.37 per share outpaced the Zacks Consensus Estimate of $1.24.

Our proven model shows that Cintas’ earnings will likely beat estimates even in the to-be-reported quarter.

Why a Likely Positive Surprise?

Cintas has the right combination of two key ingredients-

Zacks Rank & ESP: Cintas’ favorable Zacks Rank #3 (Hold), when combined with an Earnings ESP of +0.88%, predicts a likely earnings beat.

Cintas Corporation Price and EPS Surprise

 

Cintas Corporation Price and EPS Surprise | Cintas Corporation Quote

The company’s Most Accurate estimate of $1.69 per share currently comes in above the Zacks Consensus Estimate of $1.67.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It should be noted that we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

What’s Driving the Better-Than-Expected Earnings?

Efficient marketing and after-sales services offered by skilled professionals will likely aid in spurring market demand for Cintas’ products and services in the quarters ahead. The company also expects that its product portfolio solidification efforts will drive top-line growth, going forward. Additionally, the acquisition of G&K Services Inc. (for $2.2 billion) is expected to strengthen Cintas’ near-term results.

We expect that efficient implementation of the company’s enterprise resource-planning program, as well as the Systems, Applications, Products (SAP) system will aid in enhancing Cintas’ profitability in the upcoming quarters. Also, lower corporate tax rates will likely continue to support bottom-line growth, moving ahead.

Cintas currently anticipates to generate revenues of $1.625-$1.645 billion in the fiscal fourth quarter. The company’s earnings for the to-be-reported quarter are projected at $1.64-$1.69 per share. Capital expenditure for the quarter is estimated to be roughly $65 million.

The Zacks Consensus Estimates for Cintas’ Uniform Rental and Facility Services, and Other segments’ revenues for the fiscal fourth quarter are currently pegged at $1,313 million and $178 million, respectively, higher than the corresponding tallies of $1,220 million and $176 million generated in the prior-year quarter.

Meanwhile, the Zacks Consensus Estimates for Cintas’ Uniform Rental and Facility Services, and Other segments’ gross profit for the quarter to be reported are currently pegged at $591 million and $78 million, respectively, higher than the corresponding tallies of $544 million and $75 million recorded in the year-earlier quarter.

Other Stocks to Consider

Here are some other stocks in the Zacks Industrial Products sector that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Atkore International Group Inc. (ATKR - Free Report) sports a Zacks Rank #1 (Strong Buy) and has an Earnings ESP of +1.49%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eaton Corporation plc (ETN - Free Report) carries a Zacks Rank of 2 and has an Earnings ESP of +1.32%.

HD Supply Holdings, Inc. (HDS - Free Report) also holds a Zacks Rank #2 and has an Earnings ESP of +2.07%.

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