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Cintas (CTAS) to Report Q1 Earnings: What's in the Offing?

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Cintas Corporation (CTAS - Free Report) is scheduled to report first-quarter fiscal 2019 (ended August 2018) results on Sep 25, after the market closes.

The company pulled off an average positive earnings surprise of 8.79% over the last four quarters. Notably, Cintas’ fiscal fourth-quarter 2018 adjusted earnings of $1.77 per share surpassed the Zacks Consensus Estimate of $1.67.

Our proven model shows that the company will likely beat estimates in the quarter under review.

Why a Likely Positive Surprise?

Cintashas the right combination of the two key ingredients.

Earnings ESP: Cintas currently has an Earnings ESP of +2.00%. This is because the stock’s Zacks Consensus Estimate of $1.78 is lower than the Most Accurate Estimate of $1.82 per share.

Cintas Corporation Price and EPS Surprise

 

Cintas Corporation Price and EPS Surprise | Cintas Corporation Quote

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

Zacks Rank: Cintas’ favorable Zacks Rank #3 (Hold), when combined with a positive Earnings ESP, predicts a likely earnings beat.

Per our proven model, a stock needs to have a combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy) or 2 or at least 3 (Hold), for a likely earnings beat.

However, 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 Stellar Earnings?

Cintas will likely continue to achieve revenue build-up by increasing penetration levels for existing customers and broadening the consumer base. Also, product-portfolio solidification efforts will likely boost the company’s aggregate revenues in the quarters ahead. Moreover, the acquisition of G&K Services Inc. (March 2017) is expected to strengthen Cintas’ top line in the quarter to be reported.

The Zacks Consensus Estimates for the fiscal first-quarter revenues of the company’s Uniform Rental and Facility Services, First Aid and Safety Services and Other Services businesses are currently pegged at $1,373 million, $150 million and $165 million, respectively, higher than the corresponding tallies of $1,312 million, $141 million and $159 million recorded in the year-ago quarter.

Stronger revenues, diligent cost-saving measures and successful enterprise resource planning (ERP) system will likely continue to drive Cintas’ margins in the near-term quarters.

The Zacks Consensus Estimates for the fiscal first-quarter gross profit of the company’s Uniform Rental and Facility Services, First Aid and Safety Services and Other Services businesses are currently pegged at $733 million, $73 million and $71 million, respectively, higher than the corresponding tallies of $707 million, $67 million and $68 million recorded in the year-earlier quarter.

Stocks to Consider

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

Alcoa Corporation (AA - Free Report) , Alcoa Corp. (AA - Free Report) , with an Earnings ESP of +12.53% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar Inc. (CAT - Free Report) , with an Earnings ESP of +1.14% and a Zacks Rank of 1.

Flowserve Corporation (FLS - Free Report) , with an Earnings ESP of +4.31% and a Zacks Rank of 2.

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