Industrial Stocks Earnings Slated on May 1: EMR, ETN & More

The first-quarter earnings season is in full swing with around 267 S&P 500 companies already having reported financial numbers till Apr 27. Total earnings for these companies are up 25.1% year over year on 10% higher revenues, with 76.8% beating earnings estimates and 73.8% surpassing top-line expectations. Based on the hitherto observed pattern, the first quarter is anticipated to register improvement in earnings and revenues.  

Per the latest Earnings Preview, overall earnings for S&P 500 companies are expected to rise 22.6% on 8.4% revenue growth, the highest quarterly earnings growth rate in the last seven years. This represents better growth projections from the previous quarter — courtesy of a corporate tax overhaul and relatively healthy job data.

Given the ongoing healthy scenario, it is quite natural that most sectors should deliver an impressive performance. In fact, per the above report, 13 of the 16 Zacks sectors are projected to end the first quarter with double-digit earnings growth on a year-over-year basis. Only the Autos are expected to end the quarter with bottom line decline.

One of these well-performing sectors is Industrial Products sector. According to the latest report, total first-quarter earnings of the sector participants are likely to increase 35.4% from the same period last year on 15.4% higher revenues.

Currently, the sector seems to have regained its momentum after struggling with reduced investment in the energy sector, soft commodity prices as well as poor economic conditions in some developed and developing nations over the last few years. The rebound can be attributed to increased infrastructure spending as well as rise in manufacturing and mining activity.

Given this backdrop, it will be interesting to wait and see how some of the Industrial stocks fare when the companies release their results on May 1.

Emerson Electric Co. EMR is scheduled to report second-quarter fiscal 2018 results before the opening bell. The global technology and engineering company, which is a provider of innovative solutions for customers in industrial, commercial, and residential markets, surpassed estimates twice in the trailing four quarters, with an average positive surprise of 2.8%. In the last reported quarter, the company surpassed estimates by 7.4%.

Emerson Electric Co. Price and EPS Surprise

Emerson Electric Co. Price and EPS Surprise | Emerson Electric Co. Quote

The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $4,200 million, reflecting year-over-year growth of 17.2%. The estimate for earnings per share is 71 cents, indicating an improvement of 22.4% from the year-ago quarter.

Our quantitative model hints at an earnings beat for this Zacks Rank #3 (Hold) company in the upcoming quarterly results. This is because Emerson Electric has an Earnings ESP of +0.65% in addition to a favorable Zacks Rank. (Read more: Emerson Electric Q2 Earnings: Is a Beat in Store?)

Eaton Corporation, PLC ETN, which will report first-quarter 2018 results before the market opens, carries a Zacks Rank #2 (Buy) and an Earnings ESP of -0.66%, a combination which makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC Price and EPS Surprise | Eaton Corporation, PLC Quote

The Zacks Consensus Estimate for revenues in the to-be-reported quarter stands at $5,089 million, reflecting year-over-year growth of 5%. The estimate for earnings per share is pegged at $1.06, reflecting growth of 10.4% compared with the year-ago quarter.

Notably, Eatonsurpassed the Zacks Consensus Estimate twice in the trailing four quarters, delivering an average positive surprise of about 3%. The company’s performance in the first quarter is anticipated to gain from its restructuring initiatives and share repurchases, completed in the last two years. However, the company’s Electric Products segment’s (major contributor to its total revenues) revenues are projected to drop of 1.8% sequentially. (Read more: Eaton to Report Q1 Earnings: What's in the Cards?)

Johnson Controls International plc JCI is also scheduled to report second-quarter fiscal 2018 results before the opening bell. The company, which is a provider of building products and technology, surpassed estimates once with three in-line earnings in the trailing four quarters, with an average positive surprise of 1.5%. In the last reported quarter, the company surpassed estimates by 5.9%.

Johnson Controls International plc Price and EPS Surprise

Johnson Controls International plc Price and EPS Surprise | Johnson Controls International plc Quote

The Zacks Consensus Estimate for revenues in the to-be-reported quarter stands at $7,450 million, reflecting growth of 2.5% on a year-over-year basis. The estimate for earnings per share is pegged at 52 cents, mirroring growth of 4% from the year-ago quarter.

Our proven model does not show that Johnson Controls is likely to beat earnings this quarter as it does not possess the key components. The company has an Earnings ESP of -1.11% and a Zacks Rank #4 (Sell).

Xylem Inc. XYL is scheduled to report first-quarter 2018 results before the opening bell. The company, which is a provider of water technology solutions & water and wastewater treatment solutions, surpassed estimates twice in the trailing four quarters, with an average negative surprise of 0.02%.

Xylem Inc. Price and EPS Surprise

Xylem Inc. Price and EPS Surprise | Xylem Inc. Quote

The Zacks Consensus Estimate for revenues in the to-be-reported quarter stands at $1,179 million, reflecting year-over-year growth of 10.1%. The estimate for earnings per share is pegged at 51 cents, reflecting growth of 30.8% from the year-ago quarter.

However, our quantitative model does not show an earnings beat for this Zacks Rank #3 company in the upcoming quarterly results. This is because it has an Earnings ESP of -0.10%, which makes surprise prediction difficult. (Read more: Xylem to Report Q1 Earnings: What's in the Cards?)

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

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Johnson Controls International plc (JCI) : Free Stock Analysis Report
 
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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
 
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