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Mettler-Toledo (MTD) to Post Q1 Earnings: What's in Store?

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Mettler-Toledo International, Inc. (MTD - Free Report) is scheduled to report first-quarter 2020 results on May 7.

Notably, the company has recently provided an update on its expectations from the results of the to-be-reported quarter.

For first-quarter 2020, Mettler-Toledo now anticipates sales and local currency sales to have decreased by 4% and 3%, respectively. Previously, the company expected sales growth between 0% and 1% on a year-over-year basis in local currency.

The Zacks Consensus Estimate for sales is currently pegged at $661.75 million, indicating a decline of 2.6% from the year-ago quarter.

Adjusted earnings, which were previously expected in the range of $4.20-$4.30 per share, are now anticipated to come in below this guided range. The Zacks Consensus Estimate for earnings is pegged at $3.95 per share, suggesting a decline of 3.7% from the year-ago reported figure.

The revised first-quarter guidance is a result of coronavirus-induced disruptions throughout the first quarter.

We note the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 1.15%.

Key Factors to Note

Coronavirus pandemic, which hurt its operations in China and other regions, is likely to have affected the company’s first-quarter performance.

Further, softness in the Mettler-Toledo’s retail segment, which comprises food retail business, might have acted as a headwind in the first quarter. The Zacks Consensus Estimate for sales in Retail segment is pegged at $42.1 million, suggesting a decline of 13% from the prior-year quarter.

Nevertheless, the company’s strong product portfolio, which includes robust analytical instruments, balances and auto-chem, is expected to have driven sales in the to-be-reported quarter.

Further, the company’s strength across Laboratory and Industrial segments are anticipated to have contributed to the first-quarter performance.

The company’s strong momentum across pharmaceutical and life sciences markets are expected to have driven the segment in the quarter under review. Further, investments in field force, Spinnaker sales and marketing programs may get reflected in the results of the quarter to be reported. Further, its robust automated chemistry solutions are expected to have aided Mettler-Toledo’s momentum across drug process development field in the quarter under review. Moreover, analytical instruments portfolio that includes pH Meters, Titrators and UV Vis, is expected to have remained a tailwind.

The Zacks Consensus Estimate for sales in Laboratory segment is pegged at $366 million, indicating an improvement of 2% from the year-ago reported figure.

Industrial Instruments: Mettler-Toledo’s solid momentum across core industrial business is likely to have driven the segment’s sales in the first quarter amid sluggishness in its product inspection business.

Notably, the Zacks Consensus Estimate for sales in Industrial segment is projected at $273 million, suggesting growth of 1% from the prior-year quarter.

What Our Model Says

Our proven model conclusively predicts an earnings beat for Mettler-Toledo 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Mettler-Toledo has an Earnings ESP of +0.68% and a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies, which also have the right combination of elements to post an earnings beat this quarter:

Inphi Corporation (IPHI - Free Report) has an Earnings ESP of +20.04% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Universal Display Corporation (OLED - Free Report) has an Earnings ESP of +15.90% and a Zacks Rank #2.

Take Two Interactive (TTWO - Free Report) has an Earnings ESP of +13.24% and a Zacks Rank #3.

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