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ROP & B's Q3 Earnings on Oct 26: Here are the Key Predictions

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With the Q3 earnings season taking center stage, investors are all eagerly waiting to note the daily beats and misses of mega companies. So far, nearly 139 companies of the S&P 500 group have released their results. Per our latest Earnings Outlook, total earnings for these companies are up 22% year over year on 8.7% higher revenues, with 82% beating earnings estimates, and 62.6% surpassing top-line expectations. In Q3, overall earnings for all S&P 500 companies are anticipated to be up 20% from the year-ago quarter on revenues that are estimated to rise 7.2% year over year.

Here we talk about the Zacks Industrial Products sector — one of the 16 Zacks sectors. Per our Earnings Outlook (dated Oct 24, 2018), roughly 33.3% S&P 500 stocks from the sector have reported results for this quarter, recording 25.2% rise in earnings and 7.3% upside in revenues on a year-over-year basis. In Q3, the sector’s earnings are predicted to be up 19.6% year over year on revenue growth of 7.7%.

The U.S. industrial production tapped its 4th-straight month gain in this September. The headline numbers primarily improved on the back of robust manufacturing and mining output. The December-enacted tax overhaul, increased government spending and a favorable job-market scenario are expediting business investments and boosting the performance of industrial stocks. Nonetheless, escalating trade tensions between the United States and other economies, flaring up freight charges, and shortage of skilled workers remain major causes of concern for these businesses.

What’s in the Cards for These 2 Industrial Stocks?

Roper Technologies, Inc. (ROP - Free Report) is slated to report third-quarter 2018 results, before the market opens.

The company pulled off an average positive earnings surprise of 4.48% in the past four quarters. However, our proven model does not conclusively show that Roper will beat earnings estimates in the to-be-reported quarter. This is because 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. But that is not the case here as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Roper’s negative Earnings ESP of -0.23%, when combined with a Zacks Rank #4 (Sell), makes surprise prediction inconclusive. (Read more: Is Roper Likely to Disappoint This Earnings Season?)

You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Barnes Group Inc. (B - Free Report) is also set to report Jul-Sep quarter results, before the market opens.

The company generated an average positive earnings surprise of 6.88% in the preceding four quarters. However, our proven model does not conclusively show that Barnes Group will beat earnings estimates in the quarter under review.

The company has an Earnings EPS of -0.31%. The Zacks Consensus Estimate for the company’s third-quarter 2018 earnings is currently pinned at 81 cents. Barnes Group’s favorable Zacks Rank #3, when combined with a negative Earnings ESP, makes surprise prediction inconclusive.  

Barnes Group, Inc. Price and EPS Surprise

 

Barnes Group, Inc. Price and EPS Surprise | Barnes Group, Inc. Quote

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