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Factors Likely to Influence Alto's (ALTO) Fate in Q2 Earnings

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Alto Ingredients, Inc. (ALTO - Free Report) is expected to post top-line growth when it reports second-quarter 2021 results on Aug 3. For second-quarter revenues, the Zacks Consensus Estimate is pegged at $239 million, suggesting 12.7% growth from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for the company’s second-quarter earnings stands at 5 cents per share, indicating an 82.8% decrease from the year-ago quarter’s reported figure. However, the consensus mark remained stable in the past 30 days.

In the last reported quarter, the company delivered an earnings surprise of 141.2%. Its bottom line beat estimates by 25.2%, on average, over the trailing four quarters.

Alto Ingredients, Inc. Price and EPS Surprise

Alto Ingredients, Inc. Price and EPS Surprise

Alto Ingredients, Inc. price-eps-surprise | Alto Ingredients, Inc. Quote

Factors to Note

Alto has been gaining from higher gallon sold and rising price per gallon, driven by full production at its Pekin facility and dry mill. The company is progressing well with its various capital improvement projects, which are expected to boost revenues and enhance efficiency at its Pekin facility. Increased focus on specialty alcohol along with strength in essential ingredients remain key growth drivers. Improved margins in fuel ethanol, reduced inventory and solid fuel demand bode well.

Management remains committed to reducing debt, as part of its plans to be net debt free in 2021. In doing so, the company recently concluded the sale of its fuel-grade ethanol production facility in Madera to Seaboard Energy California, the proceeds of which are likely to help repay debt. The lowered debt levels are likely to get reflected in the second-quarter results.

Despite such upsides, the company is grappling with cost headwinds related to rising commodity costs. This might have weighed on the company’s bottom line in the quarter under review.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Alto 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.
 
Alto currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +15.25% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gildan Activewear, Inc. (GIL - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank #2, at present.

Under Armour (UAA - Free Report) currently has an Earnings ESP of +47.69% and a Zacks Rank #3.

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