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What's in Store for Mettler-Toledo (MTD) in Q3 Earnings?

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Mettler-Toledo International, Inc. (MTD - Free Report) is set to report third-quarter 2018 results on Nov 8.

The company topped the Zacks Consensus Estimate in three of the trailing four quarters while missed the same only once, recording an average positive earnings surprise of 0.73%.

In the last reported quarter, Mettler-Toledo reported adjusted earnings of $4.65 per share, which increased 18.6% on a year-over-year basis. The figure also outpaced the Zacks Consensus Estimate by 7 cents.

Net sales of $722 million surpassed the Zacks Consensus Estimate of $714.9 million and were also up 10.5% year over year.

The growth was driven by robust performance of Laboratory business across all geographies and benefits from the Biotix acquisition. Also, strong performance in China propelled growth.

For third-quarter 2018, the company anticipates local currency sales growth of 6%. Adjusted earnings are expected in the range of $4.97-$5.02 per share, up 14-15% year over year.

Notably, shares of Mettler-Toledo have lost 8.3% on a year-to-date basis against the industry’s growth of 4.3%.

 

 

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

Key Factors to Consider

Mettler-Toledo’s sales growth remains very specific to its segmental performance. The company’s well performing Laboratory segment has been driving top-line growth over the past few years.

We remain optimistic about the positive contributions from Biotix acquisition, which should continue to benefit the laboratory business’ sales figure in the quarter to be reported. Moreover, its strong product pipeline that includes robust analytical instruments, balances, auto-chem, to name a few, remains a positive for the to-be reported quarter.

Further, Spinnaker sales and marketing programs are likely to drive the top and bottom lines. Additionally, the company remains confident of its position in the European as well as Chinese market.

However, cost consolidation process related to product inspection business is likely to impact the company’s performance in the Industrial segment. Additionally, Mettler-Toledo’s Retail segment is likely to experience sluggish growth due to its lumpy nature.

Further, the U.S.-China trade war regarding tariff is a major concern for the company’s export-import activities in China.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Mettler-Toledo currently has a Zacks Rank #3 and an Earnings ESP of -2.23%, making surprise prediction difficult.

Stocks That Warrant a Look

Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

AMETEK (AME - Free Report) has an Earnings ESP of +1.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Adobe Systems Incorporated (ADBE - Free Report) has an Earnings ESP of +0.19% and carries a Zacks Rank #2.

Five9 (FIVN - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank #3.

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