For Immediate Release
Chicago, IL – September 10, 2018 – Zacks Equity Research Marine Products Corporation (MPX - Free Report) as the Bull of the Day, General MotorsCo. (GM - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onThe Kroger Co. (KR), Dave & Buster’s Entertainment, Inc. (PLAY) and Tailored Brands, Inc. (TLRD).
Here is a synopsis of all five stocks:
Bull of the Day:
Marine Products Corporation is cashing in on the strong consumer sentiment. This Zacks Rank #1 (Strong Buy) is expected to grow earnings in 2018 by the double digits.
Marine Products manufactures fiberglass motorized boats including Chaparral and Robalo. Chaparral builds sterndrive, outboard and jet drive pleasure boats, including H20 Sport and Fish & Ski Boats, SSi and SSX Sportboats among others.
Robalo builds outboard sport fishing boats including center console, dual console, walkaround cabin and bay boat models.
It sells its products to a network of 147 domestic and 85 international independent authorized dealers.
Record Quarterly Sales in Q2
On July 25, Marine Products reported its second quarter results and beat the Zacks Consensus Estimate by 5 cents. Earnings were $0.26 versus the consensus of $0.21.
Sales jumped 21.7% to a quarterly record of $87 million, up from $71.5 million in the year ago period. The increase was due to a 13.3% gain in units sold along with a 6.9% increase in the average selling price per boat.
Gross profit jumped 19.6% to $19.47 million up from $16.287 million in the year ago quarter. The profit increase was due almost solely to higher sales as gross margin fell slightly to 22.4% from 22.8% in the second quarter of 2017.
The company is also benefiting from the corporate tax cuts as its second quarter effective tax rate fell to 20% from 30.3% in the second quarter of 2017.
Marine Products also has strong cash flow. It finished the second quarter with $27.9 million in cash and marketable securities, up $6.2 million from the year ago period even though it has continued its share repurchase program and the payment of its quarterly dividend.
The dividend is currently yielding a healthy 2.1%.
The analysts got bullish on the company after the strong earnings report.
2 estimates were moved higher for the full year on both 2018 and 2019.
The 2018 Zacks Consensus Estimate rose to $0.82 from $0.78 over the last 2 months. That's earnings growth of 36.7% because it made only $0.60 in 2017.
2019 also looks to be shaping up into another solid year. The Zacks Consensus Estimate has risen to $0.86 from $0.82 over the last 60 days. That's earnings growth of 4.9%.
Bear of the Day:
General Motors Co. is caught between rising commodity costs and the trade war. This Zacks Rank #5 (Strong Sell) is expected to see declining earnings in 2018 and 2019.
General Motors is one of the largest auto makers in the world. It sells vehicles under the Cadillac, Chevrolet, Baojun, Buick, GMC, Holden, Jiefang and Wuling brands worldwide.
A Second Quarter Earnings Miss
On July 25, General Motors reported second quarter results and missed on the Zacks Consensus Estimate by 3 cents. Earnings were $1.81 versus the consensus of $1.84.
Revenue came in at $36.8 billion.
Significant increases in commodity costs and unfavorable foreign exchange impact of the Argentine peso and Brazilian real negatively impacted business expectations.
As a result, GM cut its full year guidance.
The analysts reacted to the guidance cut by lowering both 2018 and 2019 estimates.
7 were cut for 2018 in the last two months, pushing the Zacks Consensus Estimate down to $5.95 from $6.42. That's an earnings decline of 10.1% as the company made $6.62 in 2017.
Analysts expect the struggle for growth to continue next year as well as 6 estimates have been cut for 2019 in the last 60 days as well. The 2019 Zacks Consensus Estimate has fallen to $5.71 from $6.13 in that time.
None of the estimates takes into account any impact from possible auto tariffs. They would be adjusted only afterwards, if they are enacted.
Wall Street Flees the Auto Stocks
But with tariffs still looming, investors aren't taking any chances. They've been selling the auto stocks all summer long.
General Motors has fallen 19% year-to-date.
Upcoming Earnings to Watch: KR, PLAY, TLRD
Second quarter earnings season saw another robust period of upside surprises and bottom-line growth, but tepid guidance in certain industries and external issues like trade disputes kept gains at bay. Now, as we move into a quiet period for earnings, the same external factors will weigh on the minds of investors, and those reporting during this stretch will need to seriously impress.
Luckily, even during the non-traditional earnings season, investors can use the Zacks Earnings Calendar to plan out their schedules for earnings, dividend announcements, and other important financial releases. This handy tool is your perfect one-stop-shop to properly prepare for the market events that will have an impact on your own portfolio.
So will any of the reports coming in the next few days have enough positive news to outweigh other headwinds? Let’s take a closer look at a few of the marquee reports due during the week of September 10.
1. The Kroger Co.
Grocery store giant Kroger is scheduled to release its latest quarterly results before the market opens on September 13. Investors have been interested in tracking the development of Kroger’s initiatives to fend of would-be grocery disrupters, including Amazon and Blue Apron. Look for Wall Street to react to Kroger’s digital and delivery growth.
According to our latest Zacks Consensus Estimates, analysts expect Kroger to report adjusted earnings of 38 cents per share and revenue of $27.82 billion. This would represent a year-over-year slump of about 2.6% on the bottom line and a nearly 1% uptick on the top line. Kroger has seen no estimate revisions for the soon-to-be-reported quarter within the past 60 days.
2. Dave & Buster’s Entertainment, Inc.
Arcade bar and restaurant operator Dave & Buster’s is set to post its most recent earnings report before the market opens on September 14. PLAY had a multi-year run as one of the restaurant industry’s hottest stocks, but that seemed to run out of steam last year as comps growth couldn’t keep up with expectations.
Still, the stock has gotten powerful again latterly, and investors will be hoping this report can keep that momentum going. Dave & Buster’s is expected to post quarterly earnings of $0.67 per share in its upcoming report, which represents a year-over-year dip of 5.6%. Revenues are projected to be $311.45 million, up 10.9% from the year-ago quarter.
3. Tailored Brands, Inc.
Men’s Warehouse and Joseph A. Bank owner Tailored Brands is slated to announce its latest earnings results after the market closes on September 12. The stock has been trending downward since June, but shares have bounced off their six-month lows and might just be an interesting post-earnings mover if the company can impress.
Analysts are calling for Tailored Brands to report earnings of $1.07 per share and revenue of $828.36 million. These results would represent year-over-year declines of 6% and 3%, respectively.
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