Eaton (ETN) to Report Q3 Earnings: Is a Beat in the Cards?

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Eaton Corporation ETN is expected to beat earnings estimates when it reports third-quarter 2018 financial results on Oct 30, before the opening bell. The power management company delivered a positive earnings surprise of 5.30% in the last reported quarter.

What Our Quantitative Model Predicts

Our proven model shows that Eaton is likely to beat estimates in the upcoming quarterly results. A stock needs to have both a positive  Earnings ESP   (which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass estimates. The company has the right mix of both. You can see the complete list of today's Zacks #1 Rank stocks here.

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

Eaton Corporation, PLC Price and EPS Surprise

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

Earnings ESP : Earnings ESP of the company is pegged at +0.08%.

Zacks Rank : Currently, Eaton carries a Zacks Rank #2. The combination of the company's favorable Zacks Rank and a positive ESP makes us reasonably confident of a positive earnings surprise.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors to Consider

Eaton expects third-quarter earnings in the range of $1.35-$1.45 per share and organic revenues to expand 7%. The company continues to lower its outstanding shares via share repurchase, which is going to have a positive impact on earnings.

The company is restructuring its business in order to strengthen existing operations. Ongoing improvement in end-market conditions is going to have a positive impact on its earnings.

The Zacks Consensus Estimate for third-quarter total revenues of $5,489 million reflects 5.3% year-over-year growth. The Electric Products segment is a major contributor to Eaton's total revenues. The Zacks Consensus Estimate of $1,882 million for this segment's revenues projects a 1.3% year-over-year increase.

Other Stocks With Favorable Combination

Eaton is not the only company looking up this earnings season. Investors can also consider other companies from the same industry , which also have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Regal Beloit Corporation RBC has an Earnings ESP of +1.18% and a Zacks Rank #3. It is expected to report third-quarter 2018 earnings on Nov 5.

Emerson Electric Co. EMR has an Earnings ESP of +1.73% and holds a Zacks Rank #3. It is slated to report fourth-quarter fiscal 2018 earnings on Nov 6.

Rexnord Corporation. RXN has an Earnings ESP of +2.02% and a Zacks Rank #3. It is anticipated to report second-quarter fiscal 2019 earnings on Oct 30.

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Emerson Electric Co. (EMR): Free Stock Analysis Report

Rexnord Corporation (RXN): Free Stock Analysis Report

Eaton Corporation, PLC (ETN): Free Stock Analysis Report

Regal Beloit Corporation (RBC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: EMR , RXN , ETN , RBC

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