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Anixter (AXE) to Report Q3 Earnings: What's in the Cards?

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Anixter International Inc. (AXE - Free Report) is scheduled to report third-quarter 2018 results on Oct 23.

In the last reported quarter, the company’s earnings of $1.53 per share topped the Zacks Consensus Estimate of $1.42 and also came ahead of the year-ago figure of $1.36 per share.

Revenues of $2.14 billion increased 6.8% year over year and surpassed the Zacks Consensus Estimate of $2.10 billion driven by growth in all segments and geographies.

For the third quarter, Anixter expects organic sales growth in the range of 4% to 5%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Anixter has been continually upgrading its products and solution offerings to cater to the changing needs of marketplace.

The company has been benefiting from growth across all segments and geographies. In the last fiscal, the company witnessed double-digit organic sales growth in its Utility Power Solutions (UPS) segment, and in both EMEA and Emerging Markets. Rising number of multi-national customers is a tailwind.

Anixter is also gaining traction in fast-growing areas such as professional audio video. The company’s focus on selling electrical cable and other related products to data center customers and security solutions to utility customers also makes us optimistic.

Moreover, the company’s restructuring initiative, which will result in a more competitive cost structure, bodes well.

However, the company continues to face challenges in the Latin American geography, particularly Brazil, which remains a concern.

Moreover, price realization challenges in the company’s IOU business due to the cost of freight and other commodities have an adverse impact on its operating results. Customer and product mix, primarily in the UPS segment, is an overhang on margins.

Additionally, supplier price increase due to the impact of tariffs and foreign exchange volatility remain headwinds.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Anixter currently carries a Zacks Rank #3 and has an Earnings ESP of 2.55%.

Other Stocks to Consider

Here are some stocks that you may consider as our model shows that these also have the right combination of elements to post an earnings beat in their upcoming releases:

Apple (AAPL - Free Report) with an Earnings ESP of +2.45% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortinet (FTNT - Free Report) with an Earnings ESP of +2.57% and a Zacks Rank #3.

Paycom Software (PAYC - Free Report) with an Earnings ESP of +4.52% and a Zacks Rank #3.

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