Markets

Factors to Decide the Fate of Strattec (STRT) in Q4 Earnings

Strattec Security Corporation STRT is slated to release fiscal fourth-quarter 2020 results on Aug 6. The Zacks Consensus Estimate for the quarter’s loss and revenues is pegged at $1.42 per share and $52 million, respectively. The automotive equipment supplier posted better-than-expected results in the last reported quarter amid lower engineering, selling & administration expenses.

The Zacks Consensus Estimate for Strattec’s fourth-quarter loss per share has widened by 49 cents over the past 60 days. The year-ago earnings were 73 cents per share. The Zacks Consensus Estimate for revenues also suggests a year-over-year plunge of 59.7%.

Factors at Play

Strattec’s sales volumes are likely to have declined on industry headwinds and thereby hurt the firm’s fiscal fourth-quarter earnings. Heightening coronavirus fears are expected to have thwarted vehicle demand, in turn dampening demand for automotive equipment.Decline in light-vehicle production by major customers including Ford F, General Motors GM and Fiat Chrysler FCAU is anticipated to have weighed on the manufacturer of locks, latches and other related security products.

Lower sales to customers amid reduction of production schedules and closure of assembly plants due to the coronavirus pandemic might adversely impact the results. Nevertheless, cost-cut efforts are expected to have offered some respite. During the quarter to be reported, the company undertook measures like pay cuts, retrenchment of workforce, suspension of quarterly dividend, et al. in a bid to conserve cash. These initiatives are likely to have aided operating margins and cash flows despite lost revenues.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Strattec this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: The company has an Earnings ESP of 0.00%.

Zacks Rank: It carries a Zacks Rank of 1 currently.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


Click to get this free report

Ford Motor Company (F): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

Strattec Security Corporation (STRT): Free Stock Analysis Report

Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More