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Axon Enterprise (AAXN) Q2 Earnings: What's in the Cards?

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Axon Enterprise, Inc. will release second-quarter 2018 results on Aug 7, after market close.

In the last reported quarter, the company delivered a positive earnings surprise of 700%. In the trailing four quarters, the company beat estimates twice with an average positive surprise of 330%.

Let’s see how things are shaping up for this announcement.

Factors Under Consideration

Axon Enterprise is a renowned supplier of body-worn video cameras and smart weapons in the security and public safety space. The company won a number of orders for its smart weapons from various police departments in second-quarter 2018.

The Montgomery County Police Department placed an order of 1800 cameras for its agency patrol vehicles in the second quarter. The U.K.'s Kent and Essex Police Force also ordered 4730 body-worn cameras. Also
during the quarter, orders were placed by the Honolulu Police Department. Such a high demand for the company’s cameras is expected to reflect in the second-quarter sales figure.

Furthermore, the company's TASER weapons are witnessing strong and sustained demand from both its U.S.-based and international clients. Courtesy of this, the company expects its weapons business to have grown 7-10% in the second quarter.

These factors should get reflected in Axon Enterprise’s upcoming quarterly results in the form of top-line growth. The Zacks Consensus Estimate for second-quarter revenues is pegged at $96 million, reflecting 20% year-over-year improvement.

On the flip side, the company expects an increase in operational expenses in the second quarter, driven by investments in a new product pipeline, operating expenses related to VIEVU acquisition and one-time acquisition costs.

However, the solid revenue growth will most likely outweigh these operating expenses and in turn boost the company’s bottom line. Evidently, the Zacks Consensus Estimate for second-quarter earnings is pegged at 9 cents, reflecting a 125% year-over-year improvement.

Axon Enterprise, Inc Price and EPS Surprise

Axon Enterprise, Inc Price and EPS Surprise | Axon Enterprise, Inc Quote

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Axon Enterprise this quarter. Notably, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, Axon Enterprise lacks one of these attributes, as mentioned below:

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Axon Enterprise carries a Zacks Rank #3, which increases the power of surprise prediction. However, a 0.00% Earnings ESP makes surprise prediction difficult.

Meanwhile, 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 That Warrant a Look

Here are a few stocks in the Zacks Industrial Products sector worth considering on the basis of our model, which shows that they have the right combination to pull off a beat.

CUI Global is slated to report second-quarter results on Aug 6. The company has an Earnings ESP of +11.11% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Emerson Electric (EMR - Free Report) is slated to report third-quarter fiscal 2018 results on Aug 7. The company has an Earnings ESP of +0.15% and a Zacks Rank #3.

Recent Sector Release

Ingersoll-Rand plc (IR - Free Report) second-quarterly adjusted earnings came in at $1.85 per share, up 24% year over year. The bottom line also outpaced the Zacks Consensus Estimate of $1.72.

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