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Fortune Brands (FBHS) to Report Q2 Earnings: What to Expect?
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Fortune Brands Home & Security, Inc. is slated to report second-quarter 2018 results on Jul 26, after the market closes.
Except for the first quarter of 2018, this protection safety equipment & services provider delivered better-than-expected results in three of the last four quarters. Average earnings surprise was a positive 0.79%. In the last reported quarter, the company’s earnings were 56 cents per share, lagging the Zacks Consensus Estimate by 5.08%.
In the past three months, the company’s shares have declined 0.3% against 6.1% gain of the industry it belongs to.
Let us see how things are shaping up for Fortune Brands this quarter.
Factors to Affect Q2 Results
Though Fortune Brands has not provided specific forecasts for the second quarter, the yearly prediction gives us a fair view of the factors that might drive or adversely impact the quarterly results.
Fortune Brands anticipates gaining from the usually busy construction season in spring. It predicts a sound demand for repair and remodeling activities as well as high-single-digit growth in new construction to boosts its 2018 performance. Also, the strengthening business of Global Plumbing Group, favorable pricing, benefits from cost actions, earnings accretion from share buybacks and synergistic gains from acquired assets will favorably influence the yearly bottom line result.
In addition to the Global Plumbing Group, the company anticipates innovation investments, targeted to strengthen the product portfolio of the Doors segment, to be beneficial. Furthermore, Security stands to gain from growing acceptances for its new and existing products while Cabinets to see improvements on the back of restructuring actions and capacity expansion.
For the second quarter of 2018, the Zacks Consensus Estimate for the Cabinets, Plumbing, Doors and Security segments are pegged at $665 million, $486 million, $147 million and $152 million, respectively. These projections are higher than the last reported quarter’s tally of $557 million for Cabinets, $450 million for Plumbing, $110 million for Doors and $137 million for Security.
However, the U.S. housing starts in the second quarter of 2018 were not impressive. After 3.1% fall recorded in April, housing starts in May jumped 4.8% on the back of growth in the multi-family and single-family starts. Thereafter, housing starts again plunged 12.3% in June, this being the biggest fall since November 2016. Since Fortune Brands’ results are highly dependent on the U.S. housing market; weaker housing starts in the quarter under review might have been a drag on the company’s business.
Also, the company’s efforts to exit from non-profitable businesses might impact the top line in the quarters ahead. This business-exit plan will eventually help improve the company’s margins. Moreover, all the business segments are predicted to suffer from inflationary pressures — including higher raw material costs, rise in labor costs and others.
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 a 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 Fortune Brands is given below.
Earnings ESP: Earnings ESP of Fortune Brands is currently -2.10% as the Most Accurate Estimate of $1.01 stands below the Zacks Consensus Estimate of $1.04.
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
Zacks Rank: Fortune Brands 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 Zacks Industrial Products sector that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Rexnord Corporation has an Earnings ESP of +3.74% and a Zacks Rank #3.
Alarm.com Holdings, Inc. (ALRM - Free Report) has an Earnings ESP of +1.11% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Fortune Brands (FBHS) to Report Q2 Earnings: What to Expect?
Fortune Brands Home & Security, Inc. is slated to report second-quarter 2018 results on Jul 26, after the market closes.
Except for the first quarter of 2018, this protection safety equipment & services provider delivered better-than-expected results in three of the last four quarters. Average earnings surprise was a positive 0.79%. In the last reported quarter, the company’s earnings were 56 cents per share, lagging the Zacks Consensus Estimate by 5.08%.
In the past three months, the company’s shares have declined 0.3% against 6.1% gain of the industry it belongs to.
Let us see how things are shaping up for Fortune Brands this quarter.
Factors to Affect Q2 Results
Though Fortune Brands has not provided specific forecasts for the second quarter, the yearly prediction gives us a fair view of the factors that might drive or adversely impact the quarterly results.
Fortune Brands anticipates gaining from the usually busy construction season in spring. It predicts a sound demand for repair and remodeling activities as well as high-single-digit growth in new construction to boosts its 2018 performance. Also, the strengthening business of Global Plumbing Group, favorable pricing, benefits from cost actions, earnings accretion from share buybacks and synergistic gains from acquired assets will favorably influence the yearly bottom line result.
In addition to the Global Plumbing Group, the company anticipates innovation investments, targeted to strengthen the product portfolio of the Doors segment, to be beneficial. Furthermore, Security stands to gain from growing acceptances for its new and existing products while Cabinets to see improvements on the back of restructuring actions and capacity expansion.
For the second quarter of 2018, the Zacks Consensus Estimate for the Cabinets, Plumbing, Doors and Security segments are pegged at $665 million, $486 million, $147 million and $152 million, respectively. These projections are higher than the last reported quarter’s tally of $557 million for Cabinets, $450 million for Plumbing, $110 million for Doors and $137 million for Security.
However, the U.S. housing starts in the second quarter of 2018 were not impressive. After 3.1% fall recorded in April, housing starts in May jumped 4.8% on the back of growth in the multi-family and single-family starts. Thereafter, housing starts again plunged 12.3% in June, this being the biggest fall since November 2016. Since Fortune Brands’ results are highly dependent on the U.S. housing market; weaker housing starts in the quarter under review might have been a drag on the company’s business.
Also, the company’s efforts to exit from non-profitable businesses might impact the top line in the quarters ahead. This business-exit plan will eventually help improve the company’s margins. Moreover, all the business segments are predicted to suffer from inflationary pressures — including higher raw material costs, rise in labor costs and others.
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 a 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 Fortune Brands is given below.
Earnings ESP: Earnings ESP of Fortune Brands is currently -2.10% as the Most Accurate Estimate of $1.01 stands below the Zacks Consensus Estimate of $1.04.
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise
Fortune Brands Home & Security, Inc. Price, Consensus and EPS Surprise | Fortune Brands Home & Security, Inc. Quote
Zacks Rank: Fortune Brands 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 Zacks Industrial Products sector that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Atkore International Group Inc. (ATKR - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Rexnord Corporation has an Earnings ESP of +3.74% and a Zacks Rank #3.
Alarm.com Holdings, Inc. (ALRM - Free Report) has an Earnings ESP of +1.11% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>