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Industrial Stocks Q1 Earnings on Apr 19: GWW, PNR, SON & GTLS
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The Q1 earnings season has kicked off on an impressive note, with total earnings for the 24 S&P 500 members that have released results so far, surging 39.3% year over year on 11.7% higher revenues, per the latest Earnings Trends report. Notably, overall earnings for all the S&P 500 companies are expected to be up 16.6% on 7.5% growth in revenues this season, highlighting the highest quarterly earnings growth rate in the last seven years.
Industrial Sector on Growth Path
The Industrial Products sector, currently placed at the top 6% out of the 16 Zacks sectors, is one of the sectors which are expected to record double-digit earnings growth, mainly driven by the U.S. tax reform. According to our latest numbers, the sector’s earnings are on track to be up 24.1% in the quarter compared with last year.
The Industrial Products sector, which was affected by soft commodity prices, reduced investment in the energy sector, dismal economic conditions in some developed and developing nations in the last few years, regained its ground last year. The turnaround in its performance is chiefly backed by increased infrastructure spending and other growth-friendly policies of the new administration. Rise in manufacturing and mining activity also played a crucial role.
Driving Factors for the Sector in Q1
Industrial production is one of the leading economic indicators for industrial stocks. U.S. industrial production inched up 0.5% in March. Further, U.S. housing starts rose 1.9% in the month led by rebound in construction of multi-family housing units.
Also, the U.S Architecture Billings Index (ABI), an economic indicator that provides an approximately nine-to-12 month glimpse into the future of non-residential construction spending activity, was 52 in February. Any score more than 50 indicates billings growth and reflects a healthy business environment.
However, the latest report of the Institute for Supply Management (ISM) stated that the Purchasing Managers Index (PMI) edged down 1.5% to 59.3% in March from February. This indicates the likely surge in raw material costs, as well as fear among manufacturers about the impact of steel and aluminum import tariffs imposed by Trump last month. U.S.-China trade tensions haven't allayed as Trump seeks an added tariff of $100 billion on China products in addition to the already-proposed $50 billion.
It will be interesting to see how some of the industrial stocks fare when the companies release first-quarter 2018 numbers on Apr 19.
Our Picks
W.W. Grainger, Inc. (GWW - Free Report) will report results before the opening bell. The company has an Earnings ESP of -1.73% as the Most Accurate estimate is $3.33, while the Zacks Consensus Estimate is pegged at $3.39. The company carries a favorable Zacks Rank #2 (Buy), but its negative ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Over the preceding four quarters, Grainger beat estimates in three occasions and missed in the other, delivering an average positive surprise of 12%. The company is expected to benefit from pricing initiatives, digital-marketing strategies and efforts to bring its Canadian business back to profitability. However, elevated expenses and fluctuation in oil and gas prices are likely to affect results. (Read more: What's in the Offing for Grainger (GWW - Free Report) in Q1 Earnings?).
The company surpassed the Zacks Consensus Estimate in three out of the trailing four quarters and missed in the other, delivering an average positive surprise of 1.9%. Pentair’s performance in the first quarter is anticipated to be primarily backed by strength in the Enclosures and Process businesses despite volatile end markets and raw material price inflation. (Read more: What's in the Cards for Pentair (PNR - Free Report) This Earnings Season?)
Sonoco Products Company (SON - Free Report) , which will report quarterly results on Apr 19, carries a Zacks Rank #3 and an Earnings ESP of -1.16%, a combination which makes surprise prediction difficult. Over the last four quarters, the company outpaced the Zacks Consensus Estimate in three occasions and missed in the other, pulling off an average positive surprise of 1.6%.
Chart Industries, Inc. (GTLS - Free Report) will report its results before the opening bell. The company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 19 cents for the quarter. The company carries a favorable Zacks Rank #3. Chart Industries beat estimates in two of the past four quarters, recording an average positive surprise of 6.1%.
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
Industrial Stocks Q1 Earnings on Apr 19: GWW, PNR, SON & GTLS
The Q1 earnings season has kicked off on an impressive note, with total earnings for the 24 S&P 500 members that have released results so far, surging 39.3% year over year on 11.7% higher revenues, per the latest Earnings Trends report. Notably, overall earnings for all the S&P 500 companies are expected to be up 16.6% on 7.5% growth in revenues this season, highlighting the highest quarterly earnings growth rate in the last seven years.
Industrial Sector on Growth Path
The Industrial Products sector, currently placed at the top 6% out of the 16 Zacks sectors, is one of the sectors which are expected to record double-digit earnings growth, mainly driven by the U.S. tax reform. According to our latest numbers, the sector’s earnings are on track to be up 24.1% in the quarter compared with last year.
The Industrial Products sector, which was affected by soft commodity prices, reduced investment in the energy sector, dismal economic conditions in some developed and developing nations in the last few years, regained its ground last year. The turnaround in its performance is chiefly backed by increased infrastructure spending and other growth-friendly policies of the new administration. Rise in manufacturing and mining activity also played a crucial role.
Driving Factors for the Sector in Q1
Industrial production is one of the leading economic indicators for industrial stocks. U.S. industrial production inched up 0.5% in March. Further, U.S. housing starts rose 1.9% in the month led by rebound in construction of multi-family housing units.
Also, the U.S Architecture Billings Index (ABI), an economic indicator that provides an approximately nine-to-12 month glimpse into the future of non-residential construction spending activity, was 52 in February. Any score more than 50 indicates billings growth and reflects a healthy business environment.
However, the latest report of the Institute for Supply Management (ISM) stated that the Purchasing Managers Index (PMI) edged down 1.5% to 59.3% in March from February. This indicates the likely surge in raw material costs, as well as fear among manufacturers about the impact of steel and aluminum import tariffs imposed by Trump last month. U.S.-China trade tensions haven't allayed as Trump seeks an added tariff of $100 billion on China products in addition to the already-proposed $50 billion.
It will be interesting to see how some of the industrial stocks fare when the companies release first-quarter 2018 numbers on Apr 19.
Our Picks
W.W. Grainger, Inc. (GWW - Free Report) will report results before the opening bell. The company has an Earnings ESP of -1.73% as the Most Accurate estimate is $3.33, while the Zacks Consensus Estimate is pegged at $3.39. The company carries a favorable Zacks Rank #2 (Buy), but its negative ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Over the preceding four quarters, Grainger beat estimates in three occasions and missed in the other, delivering an average positive surprise of 12%. The company is expected to benefit from pricing initiatives, digital-marketing strategies and efforts to bring its Canadian business back to profitability. However, elevated expenses and fluctuation in oil and gas prices are likely to affect results. (Read more: What's in the Offing for Grainger (GWW - Free Report) in Q1 Earnings?).
W.W. Grainger, Inc. Price and EPS Surprise
W.W. Grainger, Inc. Price and EPS Surprise | W.W. Grainger, Inc. Quote
Pentair plc (PNR - Free Report) , which will report quarterly results before the market opens, carries a Zacks Rank #3 (Hold) and an Earnings ESP of -0.27%, a combination which makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company surpassed the Zacks Consensus Estimate in three out of the trailing four quarters and missed in the other, delivering an average positive surprise of 1.9%. Pentair’s performance in the first quarter is anticipated to be primarily backed by strength in the Enclosures and Process businesses despite volatile end markets and raw material price inflation. (Read more: What's in the Cards for Pentair (PNR - Free Report) This Earnings Season?)
Pentair plc Price and EPS Surprise
Pentair plc Price and EPS Surprise | Pentair plc Quote
Sonoco Products Company (SON - Free Report) , which will report quarterly results on Apr 19, carries a Zacks Rank #3 and an Earnings ESP of -1.16%, a combination which makes surprise prediction difficult. Over the last four quarters, the company outpaced the Zacks Consensus Estimate in three occasions and missed in the other, pulling off an average positive surprise of 1.6%.
Sonoco Products Company Price and EPS Surprise
Sonoco Products Company Price and EPS Surprise | Sonoco Products Company Quote
Chart Industries, Inc. (GTLS - Free Report) will report its results before the opening bell. The company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 19 cents for the quarter. The company carries a favorable Zacks Rank #3. Chart Industries beat estimates in two of the past four quarters, recording an average positive surprise of 6.1%.
Chart Industries, Inc. Price and EPS Surprise
Chart Industries, Inc. Price and EPS Surprise | Chart Industries, Inc. Quote
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>>