Looking at the releases of the S&P 500 group, results released so far for the April-June quarter gives us a rosy picture. It’s worth mentioning here that the S&P 500 has gained 1% in three weeks ended Aug 2.
Per our latest Earnings Preview report, roughly 76.2% of the group members have reported results till Aug 2. Earnings of the companies, which already reported results, have increased 25% year over year while revenues expanded 10.4%. Beat was measured at 80.1% for earnings and 73.8% for revenues.
Here, we will talk about the machinery industry, broadly grouped under Industrial Products — one of the 16 Zacks sectors. The sector has yielded 2.7% return in three weeks ended Aug 2, the performance being mainly driven by results and projections released by industrial companies during the period.
Moreover, we believe that the strengthening of industrial production in the United States, expanding manufacturing sector, solid orders for U.S.-made machinery and a healthy job market are a few other factors influencing the sector. Moreover, the implementation of the new tax policy in the country last December, as well as accelerating growth of the global and U.S. economies, will be conducive for industrial companies. However, increasing trade tensions between the United States and other foreign nations, resulting in higher raw material costs, are a major threat to corporate margins at present.
Considering all the aspects, the Industrial Products sector seems well positioned to record earnings and sales growth in the April-June quarter. Notably, it is one the fourteen sectors that are expected to record positive earnings growth in the quarter under review. The sector’s earnings are predicted to increase 34.5% year over year and revenues are anticipated to grow 12.4%.
For the S&P 500 group, earnings in the April-June quarter are projected to grow 23.9% year over year and revenues are anticipated to increase 9.3%.
What’s in Store for Machinery Companies: CFX, KMT, SNHY & SOHVY?
Below, we briefly discussed expectations from the four machinery stocks, slated to report their numbers for the April-June quarter.
Colfax Corporation (CFX - Free Report) : This machinery company will release its second-quarter results on Aug 6, before the market opens. Colfax delivered better-than-expected results in two of the last four quarters while reporting in-line results in the others. The average earnings surprise was a positive 4.14%.
Colfax Corporation Price, Consensus and EPS Surprise