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Fortive (FTV) to Benefit From Acquisitions in Q3 Earnings

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Fortive Corporation (FTV - Free Report) is slated to report third-quarter 2018 results on Oct 25.

The company topped the Zacks Consensus Estimate in the trailing four quarters, recording an average beat of 4.57%.

In the last reported quarter, Fortive delivered a positive earnings surprise of 2.25%. Earnings of 91 cents per share surged 28.2% year over year and 16.7% sequentially. The figure also came ahead of management’s guidance of 86-90 cents.

Revenues surged 6.9% sequentially and 14.1% year over year to $1.86 billion. The figure also surpassed the Zacks Consensus Estimate of $1.83 billion.

Robust product portfolio, strong performance in the end markets, solid momentum across all the platforms and benefits from acquisitions drove top-line growth year over year.

For third-quarter 2018, Fortive anticipates adjusted net earnings between 83 cents and 87 cents per share. The Zacks Consensus Estimate for earnings is pegged at 88 cents.

Further, the Zacks Consensus Estimate for revenues is projected at $1.86 billion.

Let’s see how things are shaping up for this quarter.

Acquisitions & Portfolio Strength — Key Catalysts

Fortive’s strong endeavors toward innovation and expansion of its key offerings on the back of its strong and accretive acquisitions will continue to drive top-line growth.

The company’s acquisitions of eMaint, Orpak, Landauer and Industrial Scientific, which have aided the expansion of Fortive’s product portfolio, are expected to continue driving core revenues in the to-be-reported quarter.

During the third quarter, Fortive completed the acquisition of Accruent from Genstar Capital. This expanded the solutions portfolio of the company, which, in turn, is likely to aid its third-quarter results.

Further, the company’s robust Fluke, Tektronix, Jacobs Vehicle Systems, Gilbarco Veeder-Root and sensing technologies are expected to aid its performance across the globe in the third quarter.

Additionally, Tektronix 5 Series mixed-signal oscilloscope has gained traction since its release. Also, 6 Series mixed-signal oscilloscope, which was launched at the end of the last reported quarter, will continue to expand Fortive’s market share.

Positive Outlook

Fortive’s segments — Professional Instrumentation and Industrial Technologies —generated revenues of $889 million and $967 million in the last reported quarter, respectively.

The Zacks Consensus Estimate for revenues in both the segments in the to-be-reported quarter is projected at $892 million and $953 million, respectively.

If estimates are compared with the actual year-ago quarter’s figure, then Professional Instrumentation exhibits growth of 17.8%, while Industrial Technologies displays an improvement of 7.4%.

What Our Model Says

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

Fortive currently has a Zacks Rank #3 and an Earnings ESP of +0.95%. Hence, our proven model indicates that the company is likely to beat estimates in the third quarter.

Stocks That Warrant a Look

Here are few stocks worth considering as our model shows that these have the right combination of elements to deliver earnings beat in the upcoming releases.

Vishay Intertechnology (VSH - Free Report) has an Earnings ESP of +0.62% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Energy Industries (AEIS - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank #2.

AMETEK (AME - Free Report) has an Earnings ESP of +0.71% and a Zacks Rank #2.

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