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Industrial Stocks' Q2 Earnings on Jul 26: FBHS, ALLE & More

The Q2 earnings season has kicked off on an impressive note. Nearly 87 S&P 500 members have already released their results, till Jul 20. Per our latest Earnings Preview , total earnings for these companies are up 20.9% year over year on 10.3% higher revenues, with 86.2% beating earnings estimates, and 77% surpassing top-line expectations.

Against this backdrop, the second-quarter earnings session is likely to register healthy earnings growth on a year-over-year basis. Notably, overall earnings for S&P 500 companies are anticipated to be up 21% from the year-ago quarter on revenues that are estimated to increase 8.3%.

The Zacks Industrial Products sector is one of the 11 sectors anticipated to report double-digit earnings growth in the quarter. Our Earnings Preview reveals that earnings and revenues of all the industrial stocks in the benchmark index will likely climb 27% and 11.2%, respectively, on a year-over-year basis in this reporting cycle.

Industrial stocks have been in investors' good graces, of late, driven by encouraging factors such as rise in U.S. manufacturing and mining expenditure. Investments across these domains have been gathering steaming on the back of the White House enacted tax overhaul and an upbeat job market.

A rebound in June's industrial production numbers and capacity utilization remaining below the long-term average makes us optimistic toward the sector's performance in the April-June quarter.

Nonetheless, the Trump administration's aggressive stance on trade issues, retaliatory measures from other countries or higher prices for consumables might derail industrial gains, going forward.

What's in Store for These 4 Industrial Stocks?

Fortune Brands Home & Security, Inc.FBHS is slated to report second-quarter 2018 results, after the market closes .

Except for the first quarter of 2018, this protection safety equipment & services provider delivered better-than-expected results in three of the last four quarters. Average earnings surprise was a positive 0.79%. In the last reported quarter, the company's earnings came in at 56 cents per share, missing the Zacks Consensus Estimate by 5.08%.

Our proven model does not conclusively show that Fortune Brands would beat estimates in this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

That is not the case here as we will see below.

Fortune Brands' Earnings ESP is currently pegged at -2.10%. The company's favorable Zacks Rank of 3, when combined with a negative Earnings ESP, makes surprise predictions inconclusive.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Increased global construction spending and strengthening business of the Global Plumbing Group will likely have driven the company's Q2 earnings. However, fall in U.S. housing starts and material cost inflation remain major causes of concern. (Read More: Fortune Brands to Report Q2 Earnings: What to Expect? )

Allegion plcALLE is scheduled to report Q2 numbers, before the market opens.

The company pulled off an average positive earnings surprise of 6.08% over the past four quarters. The Zacks Consensus Estimate for the to-be-reported quarter earnings is pegged at $1.20.

The second-quarter earnings of this Zacks Rank #3 company will likely reflect benefits from a solid top-line performance, ongoing pricing actions and greater operational efficacy. Nonetheless, input cost inflation and rising freight charges remain drags. (Read More: Allegion to Report Q2 Earnings: What's in the Cards? ).

Roper Technologies, Inc.ROP is slated to report its quarterly figures, before the market opens.

The company pulled off an average positive earnings surprise of 2.95% over the preceding four quarters. Notably, in the last reported quarter, Roper's earnings of $2.61 per share surpassed the Zacks Consensus Estimate by 4.82%. The estimate for the to-be-reported quarter earnings is pegged at $2.70.

This Zacks Rank #3 stock's earnings will likely reflect the favorable impact of robust revenues, lower taxes and stronger innovation efficacy. Nevertheless, material cost inflation remains a major drag. (Read More: Roper to Report Q2 Earnings: What's in the Cards? ).

Flowserve CorporationFLS is expected to report second-quarter 2018 results.

The company reported an average negative earnings surprise of 11.26% over the last four quarters. However, Flowserve's first-quarter 2018 adjusted earnings of 27 cents per share came in line with the Zacks Consensus Estimate.

Our proven model does not conclusively show an earnings beat for Flowserve in the to-be-reported quarter. This is because the company currently carries a Zacks Rank #4 (Sell) and an Earnings EPS of -0.15%. (Read More: What's in the Offing for Flowserve in Q2 Earnings? )

It should be noted that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

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Roper Technologies, Inc. (ROP): Free Stock Analysis Report

Flowserve Corporation (FLS): Free Stock Analysis Report

Fortune Brands Home & Security, Inc. (FBHS): Free Stock Analysis Report

Allegion PLC (ALLE): 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.


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

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