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What's in the Offing for H&E Equipment's (HEES) Q2 Earnings?

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H&E Equipment Services, Inc. (HEES - Free Report) is scheduled to report second-quarter 2019 results on Jul 25, before the opening bell. H&E Equipment has an impressive earnings surprise history having surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 31.47%.

Which Way Are Q2 Estimates Headed?

The Zacks Consensus Estimate for second-quarter revenues is pegged at $328.7 million, indicating an improvement of 5.91% from the year-ago quarter. The same for earnings stands at 58 cents, at same level as the prior-year reported figure. Notably, the consensus mark has remained unchanged over the past 30 days.

H&E Equipment Services, Inc. Price and EPS Surprise
 

H&E Equipment Services, Inc. Price and EPS Surprise

H&E Equipment Services, Inc. price-eps-surprise | H&E Equipment Services, Inc. Quote


Shares of the company have plunged 31.4% in a year, compared with the industry’s decline of 3.1%.

Will the upcoming earnings release provide a boost to H&E Equipment Services’ stock? Let’s take a look.

Factors at Play

The company’s top-line will benefit from solid end user market demand. Demand for equipment in non-residential and other end user construction markets remains solid. Notably, the American Institute Architects is projecting non-residential construction to improve 4.4% throughout 2019. Activity in energy-related markets remained at steady levels in the June-ended quarter. Increased spending for transportation and infrastructure-related projects also bode well. Results in the quarter will also reflect the impact of acquisitions of Contractors Equipment Center, Rental Inc. and We-Rent-It.

Gross margin performance in the quarter will benefit from performance improvements within the various revenue segments. However, SG&A expenses will be likely be elevated in the to-be-reported quarter owing to higher employee salaries, wages, payroll taxes and related employee benefit and other employee-related expenses on account of acquisitions, a larger workforce and higher incentive compensation related to improved profitability. This will weigh on operating margins in the June ending quarter.

Earnings Whispers

Our proven model does not show that H&E Equipment Services is likely to beat earnings estimates this 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: H&E Equipment Services’ Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%.

Zacks Rank: H&E Equipment Services currently has a Zacks Rank #4 (Sell). Notably, we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few Industrial Products stocks which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

John Bean Technologies Corporation (JBT - Free Report) has an Earnings ESP of +1.71% and a Zacks Rank of 1. The stock has appreciated 29.5% over the past year. You can seethe complete list of today’s Zacks #1 Rank stocks here.

AptarGroup, Inc. (ATR - Free Report) has a Zacks Rank #2 and an Earnings ESP of +0.56%. The stock has gained 29.7% over the past year.

Napco Security Technologies, Inc. (NSSC - Free Report) , a Zacks Rank #2 stock, has an Earnings ESP of +4.00%. The stock has surged 54.3% in a year’s time.

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