As we move further into this earnings season, the earnings and revenue growth picture looks pretty steady compared to the last few reported quarters. Many companies have reported better-than expected results. We are now looking forward to seeing more sectors coming out with positives surprises.
Per the latest Earnings Trends , 148 S&P 500 companies have reported earnings till Jan 26, accounting for 29.5% of the index's total market capitalization, with 68.2% topping EPS (earnings per share) estimates and 55.4% coming in ahead of top-line expectations.
With 352 index members yet to report their earnings, earnings from all the S&P 500 companies combined are expected to rise by 5.3% from the year-ago period on revenue growth of 3.8%.
Four out of 16 Zacks sectors are expected to witness a decline in earnings in the fourth quarter, with Conglomerates, Autos and Transportation being the biggest drag. However, the Oil/Energy sector is expected to see some light in the tunnel, first time after eight quarters of declines.
The Industrial Product sector is looking reasonably good. For the sector, earnings are expected to grow 1.4%, while sales are touted to rise 4.1% from the last year. The projected improvement is majorly driven by increased capital investment in the infrastructure market.
Let's have a sneak peek at three major Industrial Product stocks set to release their fourth-quarter 2016 results on Monday.
IDEX CorporationIEX is scheduled to report its numbers after market close. Notably, over the trailing four quarters, the company delivered an average positive surprise of approximately 5.19%, beating estimates thrice.
Headquartered in Lake Forest, IL, IDEX is an applied solutions company that specializes in a diverse range of applications such as fluid and metering technologies; health and science technologies; and fire, safety and other products built to customer specifications.
IDEX anticipates soft demand patterns in its energy and agriculture businesses to be offset by improving demand in water, scientific fluidics and dispensing businesses. Consequently, the company expects organic revenue for full-year 2016 to be down 1%. Adjusted earnings for full-year 2016 are expected within $3.72-$3.74 per share, while fourth-quarter earnings are expected to be in the range of 92 cents to 94 cents.
Our proven model does not conclusively shows that IDEX is likely to beat earnings this season. 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, But this is not the case for IDEX. The company has a Zacks Rank #4 (Sell) and ESP of 0.00%.
You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
IDEX Corporation Price and EPS Surprise
Graco Inc.GGG is scheduled to report its numbers after market close. Notably, over the trailing four quarters, the company delivered an average positive surprise of approximately 2.23%, beating estimates twice.
Based in Minneapolis, MN, Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries. The company supplies technology and expertise for the management of fluids in both industrial and commercial settings.
We cannot predict and earnings beat for Graco's as it has an ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .
Graco Inc. Price and EPS Surprise
Packaging Corporation of AmericaPKG is slated to report its earnings after market close. Notably, over the trailing four quarters, the company delivered an average negative surprise of approximately 4.24%, missing estimates on all occasions.
Headquartered in Lake Forest, IL, Packaging Corporation functions in an intensively competitive industry. The company faces risks of unstable raw material prices, which include wood fiber, fuels, and chemicals. New and more stringent environmental regulations may discourage, reduce the availability of raw materials, or make them more expensive. In addition, costs for key chemicals used in its manufacturing operations also fluctuate. This increases the unpredictability of earnings and contracts margins.
Management expects seasonally lower volumes of containerboard and corrugated products in the fourth quarter. The company has increased price of containerboard by $50 per ton effective Oct 1, 2016 as well as raised price of its corrugated products. It expects a lower mix in white paper due to colder weather. Considering these items, it expects fourth-quarter earnings to be $1.15 per share.
Packaging Corporation's Zacks Rank #3 when combined with ESP of -1.72% makes surprise prediction difficult .
Packaging Corporation of America Price and EPS Surprise
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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.