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Will Stanley Black (SWK) Q1 Earnings Disappoint Investors?
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Stanley Black & Decker, Inc. (SWK - Free Report) is scheduled to report first-quarter 2018 results on Apr 20, before market opens.
The company pulled off an average positive earnings surprise of 4.28% over the last four quarters. Notably, in the last reported quarter, Stanley Black & Decker’s adjusted earnings of $2.18 per share surpassed the Zacks Consensus Estimate of $2.14 by 1.87%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Stanley Black & Decker noted that reduced onshore project activity in the pipeline market and dismal automotive system sales will dent its first-quarter 2018 revenues. Moreover, prevalent sluggishness in the self-piercing rivet system and engineered fastening electronics sales might dampen the company’s industrial business. Also, a lackluster security business in France is predicted to hit the company’s revenues in the quarter to be reported.
The Zacks Consensus Estimates for first-quarter revenues of Stanley Black & Decker’s Security, Industrial, and Tools & Storage segments are currently pegged at $479 million, $462 million and $2,126 million, respectively, lower than $510 million, $474 million and $2,430 million recorded in the prior quarter.
Stanley Black & Decker has been expanding its distribution and manufacturing capacity on the back of several investments. However, these expenses are expected to drag down its margins in the near term. Profitability of the company’s Tools & Storage and Security segments were hurt in the last quarter due to these growth-oriented investments.
Moreover, Stanley Black & Decker believes commodity inflation, especially in tools, will impede its profitability in the first quarter. The company expects to record net cost headwind of roughly $50 million in the first-quarter.
The company expects that its earnings in 2018 will lie in the $8.30-$8.50 per share range and first-quarter earnings will be nearly 16% of the full-year performance, being roughly 130 basis points lower than the year-ago quarter.
The Zacks Consensus Estimates for first-quarter operating profit of Stanley Black & Decker’s Security and Tools & Storage segments are currently pegged at $47.8 million and $306 million, respectively, lower than $56 million and $392 million recorded in the previous quarter.
However, sturdier sales of iconic brands like Craftsman, Lenox and Irwin, greater innovation, cost synergies secured from acquisitions, and reduced corporate-tax rate might offset adversaries, and drive Stanley Black & Decker’s first-quarter bottom-line performance.
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 have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or at least 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 here as we will see below.
Zacks ESP: Stanley Black & Decker’s Earnings ESP is 0.00%. This is because the Zacks Consensus Estimate of $1.35 comes in line with the Most Accurate estimate.
Stanley Black & Decker, Inc. Price and EPS Surprise
Zacks Rank: Stanley Black & Decker’s unfavorable Zacks Rank #4 (Sell), when combined with an Earnings ESP of 0.00%, makes surprise predictions inconclusive.
It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat:
Alarm.com Holdings, Inc. (ALRM - Free Report) , with an Earnings ESP of +3.56% and a Zacks Rank of 1.
A. O. Smith Corporation (AOS - Free Report) , with an Earnings ESP of +1.42% and a Zacks Rank #2.
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Earlier this year, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Image: Bigstock
Will Stanley Black (SWK) Q1 Earnings Disappoint Investors?
Stanley Black & Decker, Inc. (SWK - Free Report) is scheduled to report first-quarter 2018 results on Apr 20, before market opens.
The company pulled off an average positive earnings surprise of 4.28% over the last four quarters. Notably, in the last reported quarter, Stanley Black & Decker’s adjusted earnings of $2.18 per share surpassed the Zacks Consensus Estimate of $2.14 by 1.87%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Stanley Black & Decker noted that reduced onshore project activity in the pipeline market and dismal automotive system sales will dent its first-quarter 2018 revenues. Moreover, prevalent sluggishness in the self-piercing rivet system and engineered fastening electronics sales might dampen the company’s industrial business. Also, a lackluster security business in France is predicted to hit the company’s revenues in the quarter to be reported.
The Zacks Consensus Estimates for first-quarter revenues of Stanley Black & Decker’s Security, Industrial, and Tools & Storage segments are currently pegged at $479 million, $462 million and $2,126 million, respectively, lower than $510 million, $474 million and $2,430 million recorded in the prior quarter.
Stanley Black & Decker has been expanding its distribution and manufacturing capacity on the back of several investments. However, these expenses are expected to drag down its margins in the near term. Profitability of the company’s Tools & Storage and Security segments were hurt in the last quarter due to these growth-oriented investments.
Moreover, Stanley Black & Decker believes commodity inflation, especially in tools, will impede its profitability in the first quarter. The company expects to record net cost headwind of roughly $50 million in the first-quarter.
The company expects that its earnings in 2018 will lie in the $8.30-$8.50 per share range and first-quarter earnings will be nearly 16% of the full-year performance, being roughly 130 basis points lower than the year-ago quarter.
The Zacks Consensus Estimates for first-quarter operating profit of Stanley Black & Decker’s Security and Tools & Storage segments are currently pegged at $47.8 million and $306 million, respectively, lower than $56 million and $392 million recorded in the previous quarter.
However, sturdier sales of iconic brands like Craftsman, Lenox and Irwin, greater innovation, cost synergies secured from acquisitions, and reduced corporate-tax rate might offset adversaries, and drive Stanley Black & Decker’s first-quarter bottom-line performance.
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 have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or at least 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 here as we will see below.
Zacks ESP: Stanley Black & Decker’s Earnings ESP is 0.00%. This is because the Zacks Consensus Estimate of $1.35 comes in line with the Most Accurate estimate.
Stanley Black & Decker, Inc. Price and EPS Surprise
Stanley Black & Decker, Inc. Price and EPS Surprise | Stanley Black & Decker, Inc. Quote
Zacks Rank: Stanley Black & Decker’s unfavorable Zacks Rank #4 (Sell), when combined with an Earnings ESP of 0.00%, makes surprise predictions inconclusive.
It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks that you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat:
Axon Enterprise, Inc , with an Earnings ESP of +12.50% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alarm.com Holdings, Inc. (ALRM - Free Report) , with an Earnings ESP of +3.56% and a Zacks Rank of 1.
A. O. Smith Corporation (AOS - Free Report) , with an Earnings ESP of +1.42% and a Zacks Rank #2.
Can Hackers Put Money INTO Your Portfolio?
Earlier this year, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>