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Will Top-Line Growth Aid Badger Meter's (BMI) Q3 Earnings?

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Badger Meter, Inc. (BMI - Free Report) is scheduled to release third-quarter 2018 results before the opening bell on Oct 17. The company is likely to record relatively higher revenues on a year-over-year basis.

Whether this will benefit the bottom line of the company remains to be seen.

Top-Line Expansion

Badger Meter is poised to gain from growing demand for E-Series meters and ORION cellular endpoints as well as BEACON Advanced Metering Analytics managed solution. A number of impactful product-development initiatives are currently underway. In addition, the launch of E-series commercial meters with D-Flow technology in June is expected to drive incremental revenues in the impending quarter. For ORION Cellular, Badger Meter will launch Cat-M chips, which are the next-generation chips for business-to-business cellular communication.

Furthermore, Badger Meter’s opportunities for 2019 and beyond include Phyn — a joint venture between Belkin International, Inc. and Uponor Corporation — which utilizes its D-Flow ultrasonic technology in a smart water monitoring system for residential use. Moreover, inclusion in AT&T’s Smart City Alliance, a framework created by AT&T Inc., will allow Badger Meter to explore new ways for its smart water solutions to join forces with industry-leading cellular networks.

Management expects a healthy improvement in order flow on continued investments in technology and improved channels to market, to be beneficial. Solid traction is also expected from improving growth dynamics as the company remains on track to complete the integration of the D-Flow technology into residential meters.

All these factors are likely to propel top-line growth in the to-be reported quarter. The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $109 million, up from $100 million recorded a year ago.

Earnings Whispers

Our proven model conclusively shows that Badger Meter is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +4.88% as the former is pegged at 43 cents and the latter at 41 cents. Incidentally, the Zacks Consensus Estimate for third-quarter earnings represents a year-over-year growth of 51.8%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Badger Meter, Inc. Price and EPS Surprise

 

Badger Meter, Inc. Price and EPS Surprise | Badger Meter, Inc. Quote

Zacks Rank: Badger Meter sports a Zacks Rank #1. This increases the predictive power of ESP and makes us reasonably confident of an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
   
Other Stocks to Consider

Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Sprint Corporation (S - Free Report) is anticipated to release results on Oct 24. It has an Earnings ESP of +63.88% and a Zacks Rank #3.

United States Cellular Corporation (USM - Free Report) is likely to release results on Nov 14. The company has an Earnings ESP of +57.45% and carries a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for CenturyLink, Inc. (CTL - Free Report) is +6.10% and it carries a Zacks Rank of 3. The company is likely to report quarterly numbers on Nov 14.

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