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Will Regional Uncertainties Hurt Praxair's (PX) Q3 Earnings?
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Industrial gas producer and supplier Praxair Inc. (PX - Free Report) is scheduled to report third-quarter 2017 results on Oct 26, before the market opens.
In each of the last four quarters, the company delivered better-than-expected results. Average earnings surprise was a positive 1.46%. Notably, in the last quarter, the company’s earnings of $1.46 per share surpassed the Zacks Consensus Estimate by 2.10%.
In the last six months, the company’s shares have yielded 14.2% return, outperforming the gain of 11.9% recorded by the industry.
Let us see how things are shaping up for Praxair prior to this earnings announcement.
What’s Affecting Q3 Results?
Praxair sources more than 60% of revenues from its North and South American operations. This has made the company’s financials highly susceptible to economic or political uncertainties in these regions. For the second half of 2017, the company believes that customer demand in the United States will be below expectations while economic conditions in South America will continue to suffer from political tensions. Europe will likely remain stable.
Adding to the concerns is the adverse impact of the hurricanes in the United States on the demand of Praxair’s industrial gases. Also, the company faces headwinds from adverse movement in foreign currencies, geopolitical issues, rise in production costs and industry competition.
Moreover, Praxair’s balance sheet is highly leveraged, with a debt-to-capital ratio of 58.5% in second-quarter 2017. We believe, if unchecked, higher debt levels might increase the company’s financial obligations and hence, prove detrimental to its profitability.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
That is not the case for Praxair as you will see below.
Zacks ESP: Earnings ESP is currently -1.34%, as the Most Accurate estimate of $1.43 lags the Zacks Consensus Estimate of $1.44.
We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies you may want to consider in the industry as our model shows they have the right combination of elements to post an earnings beat this quarter:
Cabot Corporation (CBT - Free Report) , with an Earnings ESP of +1.62% and a Zacks Rank #2.
Air Products and Chemicals, Inc. (APD - Free Report) , with an Earnings ESP of +0.34% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Will Regional Uncertainties Hurt Praxair's (PX) Q3 Earnings?
Industrial gas producer and supplier Praxair Inc. (PX - Free Report) is scheduled to report third-quarter 2017 results on Oct 26, before the market opens.
In each of the last four quarters, the company delivered better-than-expected results. Average earnings surprise was a positive 1.46%. Notably, in the last quarter, the company’s earnings of $1.46 per share surpassed the Zacks Consensus Estimate by 2.10%.
In the last six months, the company’s shares have yielded 14.2% return, outperforming the gain of 11.9% recorded by the industry.
Let us see how things are shaping up for Praxair prior to this earnings announcement.
What’s Affecting Q3 Results?
Praxair sources more than 60% of revenues from its North and South American operations. This has made the company’s financials highly susceptible to economic or political uncertainties in these regions. For the second half of 2017, the company believes that customer demand in the United States will be below expectations while economic conditions in South America will continue to suffer from political tensions. Europe will likely remain stable.
Adding to the concerns is the adverse impact of the hurricanes in the United States on the demand of Praxair’s industrial gases. Also, the company faces headwinds from adverse movement in foreign currencies, geopolitical issues, rise in production costs and industry competition.
Moreover, Praxair’s balance sheet is highly leveraged, with a debt-to-capital ratio of 58.5% in second-quarter 2017. We believe, if unchecked, higher debt levels might increase the company’s financial obligations and hence, prove detrimental to its profitability.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
That is not the case for Praxair as you will see below.
Zacks ESP: Earnings ESP is currently -1.34%, as the Most Accurate estimate of $1.43 lags the Zacks Consensus Estimate of $1.44.
Praxair, Inc. Price and EPS Surprise
Praxair, Inc. Price and EPS Surprise | Praxair, Inc. Quote
Zacks Rank: Praxair has a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies you may want to consider in the industry as our model shows they have the right combination of elements to post an earnings beat this quarter:
FMC Corporation (FMC - Free Report) , with an Earnings ESP of +0.88% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot Corporation (CBT - Free Report) , with an Earnings ESP of +1.62% and a Zacks Rank #2.
Air Products and Chemicals, Inc. (APD - Free Report) , with an Earnings ESP of +0.34% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>