Industrial stocks, grouped under the Zacks Industrial Products sector, earnings are anticipated to decline 3.8% year over year in the third quarter of 2019 against 1.2% growth registered in the previous quarter. Also, the sector’s revenues are expected to edge down 1.2% compared with a 1.7% decline reported in the previous quarter. Margins will likely be down 0.3%, whereas the sector registered 0.3% growth in the second quarter.
Tariff woes, uptick in commodity prices and inflation in other costs are expected to have bumped up expenses for many companies. This in turn will likely get reflected in their margin results for the July-September quarter.
In addition, difficulty in sourcing skilled labors, high logistic costs and forex woes are expected to have impacted the performance of some of the companies. Further, increasing geopolitical tensions — including Brexit — and softness in the construction market in Canada are anticipated to have built pressure on revenues of a few.
Notwithstanding the woes, use of sophisticated technologies in manufacturing process, demand for remodeling activities, infrastructural development, growing adoption of e-retailing and favorable changes in tax policy might have driven revenues for some industrial players.
Below, we briefly discuss what we expect from three industrial stocks, which are slated to report their third-quarter 2019 numbers on Oct 22.
Graphic Packaging Holding Company (GPK - Free Report) will release results before the market opens. It delivered better-than-expected results in three of the last four quarters, while lagged estimates once. The average earnings surprise was a positive 8.7%.
Graphic Packaging Holding Company Price, Consensus and EPS Surprise