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Key Predictions for Q3 Earnings Reports of DOV, SON and MSA

The third-quarter earnings season is slowly unfolding with 33 companies on the S&P 500 index having reported their quarterly numbers, which makes up 10.6% of the index's total market capitalization. Per the latest Earnings Outlook as of Oct 16, these companies have put a 13.1% increase in earnings on the back of 6.4% higher sales on the scoreboard. Around 81.8% delivered positive earnings surprises while 75.8% surpassed revenue expectations. The pace of growth for this group of companies witnessed so far is almost similar to the second quarter.

Taking into account all the S&P members that are yet to disclose their numbers, total earnings for the index is expected to be up 2.3% year over year on a 5% increase in revenues in the third quarter. Though this is a deceleration from the 11.2% increase in earnings in the second quarter and 13.6% in the first, growth graph will pick up from the fourth quarter onwards. Per projections, earnings growth will be 9.1% in fourth-quarter 2017, 8.8% in first-quarter 2018, 8.9% in the second and 12.8% in the third quarter.

In this write-up, we take a sneak peek into three industrial products stocks that are slated to report their third-quarter results on Oct 19.

Dover CorporationDOV , which manufactures and sells a range of equipment and components, specialty systems, software and digital solutions, and support services worldwide, will report financial numbers after the opening bell.

Our proven model does not conclusively show that the company is likely to beat estimates this quarter. The company has an Earnings ESP of -0.71% as the Most Accurate estimate is $1.11 while the Zacks Consensus Estimate is pegged higher at $1.12. The stock carries a Zacks Rank #2 (Buy), which when combined with a negative ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

The company has surpassed the Zacks Consensus Estimates in three of the four trailing quarters, with a negative average earnings surprise history of 0.82%.

Dover Corporation Price and EPS Surprise

Dover Corporation Price and EPS Surprise | Dover Corporation Quote

Strong bookings trends along with strong backlog at the second quarter have set the company up for a strong third quarter. In the Energy segment, significant drilling activity over the last few quarters has created a large backlog of drilled but incomplete wells. This wells will get completed and eventually drive the third-quarter performance. The Zacks Consensus Estimate for the Energy segment's revenue growth for the quarter to be reported is pegged at 33%. We estimate the segment to report operating earnings of $54 million, significantly higher than the prior-year quarter's earnings of $13.3 million.

Further, solid outlook for Dover's Engineered Systems segment (that generates around 33% of its revenues) will drive the quarter's performance. In the segment, the Printing & Identification platform will continue to deliver consistent solid performance, backed by its unique position in the digital textile market and focus on consumables in marking and coding. Moreover, the industrial platform will fuel growth, led by its strong position in vehicle service and waste handling. The Zacks Consensus Estimate for the segment's revenues is projecting a 9% rise for the third quarter. The segment is forecasted to report earnings of $103 million compared with $97 million reported in the previous quarter. (Read more: Dover's Q3 Earnings to Gain from Boost in Drilling Activity )

Sonoco Products CompanySON which manufactures and sells industrial and consumer packaging products in North and South America, Europe, Australia, and Asia, will report quarterly numbers before the opening bell. The company beat estimates in three of the preceding four quarters, delivering an average positive earnings surprise of 2.3%.

Sonoco Products Company Price and EPS Surprise

Sonoco Products Company Price and EPS Surprise | Sonoco Products Company Quote

The stock has an Earnings ESP of -0.68% as the Most Accurate estimate is pegged at 73 cents while the Zacks Consensus Estimate is 74 cents. The stock's negative ESP and Zacks Rank #3 (Hold) makes surprise prediction difficult. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

For third-quarter 2017, the company anticipates earnings per share in the range of 71-77 cents. This guidance takes into consideration the impact of acquisitions, net of divestitures, and higher recovered paper prices during the third quarter. The Zacks Consensus Estimate for earnings for the third quarter is pegged at 74 cents, projecting year-over-year growth of 2.1%.

The Zacks Consensus Estimate for revenues is at $1.27 billion, reflecting year-over-year growth of 5%. As per the Zacks Consensus Estimates, the Consumer Packaging, Paper and Industrial Converted Products and Protective Solutions segments will witness year-over-year growth of 6%, 7% and 5%, respectively. This will be offset by a 3% dip in the Display Packaging segment's revenues.

Operating profit in the Consumer Packaging, Paper and Industrial Converted Products and Protective Solutions segments will increase 3%, 9% and 1% year over year, respectively. However, the Display Packaging segment's operating profit will plunge 30%.

MSA Safety IncorporatedMSA develops, manufactures and supplies safety products that protect people and facility infrastructures, will report the quarterly results after the closing bell. The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, resulting in an average positive surprise history of 4.77%.

MSA Safety Incorporporated Price and EPS Surprise

MSA Safety Incorporporated Price and EPS Surprise | MSA Safety Incorporporated Quote

The stock has an Earnings ESP of -12.50% as the Most Accurate estimate is pegged lower at 70 cents while the Zacks Consensus Estimate is 80 cents. While the stock carries a Zacks Rank #3, its negative ESP makes surprise prediction difficult.

The company is witnessing good order flow across its industrial businesses. Currently, the Zacks Consensus Estimate for revenues is pegged at $294.4 million, up 5.8% from third-quarter 2016. The company is observing solid improvements in cost structure driven by its value creation programs. It will also benefit from its recent acquisition of Globe Manufacturing Company, which will strengthen its position as a leader in the North American market for firefighter personal protective equipment ("PPE"). The Zacks Consensus Estimate for earnings the quarter is pegged at 80 cents, reflecting an 11% year-over-year growth.

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Sonoco Products Company (SON): Free Stock Analysis Report

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MSA Safety Incorporporated (MSA): 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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