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Illinois Tool (ITW) to Post Q1 Earnings: What's in the Offing?

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Illinois Tool Works Inc. (ITW - Free Report) is scheduled to release first-quarter 2020 results on May 5, before market open.

The company delivered better-than-expected results in the last four quarters, the positive earnings surprise being 2.21%, on average. In the last reported quarter, its earnings of $1.88 surpassed the Zacks Consensus Estimate of $1.85 by 1.62%.

In the past three months, shares of the industrial products and equipment manufacturer have fallen 14.9% compared with the industry’s decline of 22.5%.




 

Let us delve deeper.

Key Factors & Estimates for Q1

The coronavirus outbreak adversely impacted industrial and automotive markets in the first quarter of 2020. Weakness in the markets, in which the company has huge exposure, is expected to get reflected in its first-quarter 2020 results.

Also, it is expected to have suffered from the impacts of unfavorable movements in foreign currencies, adverse influence of product line simplification initiatives and restructuring charges. Further, huge debt levels and divestitures are expected to have been spoilsports.

The Zack Consensus Estimate for the company’s first-quarter earnings per share is pegged at $1.71, indicating a 5.5% decline from the year-ago reported figure and a 9% fall sequentially. Also, the consensus estimate for revenues of $3,334 million suggests a 6.1% decrease from the year-ago quarter’s reported number and a 3.9% dip from the last reported quarter.

On the slip side, the company is anticipated to have benefited from its enterprise strategy and solid product portfolio. Also, its shareholder-friendly policies, well-diversified operations and benefits from growth investments made earlier are expected to have aided in the quarter.

On a segmental basis, a brief discussion on estimates for the top three revenue-producing segments — based on fourth-quarter 2019 results — is provided below.

The Zacks Consensus Estimate for the Test & Measurement and Electronics segment’s revenues stands at $471 million for the first quarter, suggesting a 10.1% decline from the year-ago reported figure and a 14.7% fall from the previous quarter. The consensus estimate for Automotive OEM is at $704 million, suggesting a decline of 12.7% from the year-ago quarter and 2.9% sequentially.

Further, the Zacks Consensus Estimate for the Food Equipment segment’s revenues stands at $505 million for the first quarter, suggesting a 2.5% decline from the year-ago reported figure and an 11.6% fall from the previous quarter.

Earnings Whispers

Our proven model doesn’t predict an earnings beat for Illinois Tool this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Illinois Tool has an Earnings ESP of -0.60%, with the Most Accurate Estimate of $1.70 below the Zacks Consensus Estimate of $1.71.

Illinois Tool Works Inc. Price, Consensus and EPS Surprise

 

Illinois Tool Works Inc. Price, Consensus and EPS Surprise

Illinois Tool Works Inc. price-consensus-eps-surprise-chart | Illinois Tool Works Inc. Quote

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

Here are some companies in the Zacks Industrial Products sector that you may want to consider as according to our model these have the right combination of elements to post an earnings beat this quarter.

Ball Corporation (BLL - Free Report) currently has an Earnings ESP of +1.56% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nordson Corporation (NDSN - Free Report) presently has an Earnings ESP of +1.17% and a Zacks Rank #3.

Axon Enterprise, Inc. presently has an Earnings ESP of +18.31% and a Zacks Rank #3.

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