Luxfer Holdings PLCLXFR is slated to report third-quarter 2018 results on Oct 31, after the market closes .
The company pulled off an impressive average positive earnings surprise of 11.04% over the preceding four quarters. Notably, Luxfer Holdings' second-quarter 2018 adjusted earnings of 44 cents per share outpaced the Zacks Consensus Estimate of 35 cents by 25.7%.
Let's see how things are shaping up prior to this announcement.
Factors at Play
Luxfer believes elevated demand for its major product lines (zirconium, SoluMag, aluminum cylinders and fuel cylinders) across all end-markets will continue to bolster the company's revenues in the quarters ahead. In addition to this, the company's pricing initiatives, higher demand for the recently-launched products, greater emphasis on commercial excellence, and new global contracts will likely support the upswing. However, Luxfer predicts that weaker demand for disaster relief products might dent its top-line numbers in the to-be-reported quarter.
Luxfer is poised to boost its near-term margins on the back of the company's increased productivity, diligent cost-saving moves and pricing initiatives. However, we expect that material price inflation (on account of tariffs imposed over imports of certain intermediate products like aluminium) may continue to hurt the company's profitability in the quarter under review. Moreover, higher wage rates and expenses associated with existing productivity and simplification projects are expected to escalate costs, in turn, dampen Luxfer's profitability going forward.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely 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.
Esrnings ESP: Luxfer has an Earnings ESP of 0.00%. This is because the Zacks Consensus Estimate as well as the Most Accurate Estimate for the company's third-quarter 2018 earnings are both pinned at 33 cents.
Luxfer Holdings PLC Price and EPS Surprise
Luxfer Holdings PLC Price and EPS Surprise | Luxfer Holdings PLC Quote
Zacks Rank: Luxfer's favourable Zacks Rank #1, when combined with an Earnings ESP of 0.00%, makes surprise prediction inconclusive.
It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the Zacks Industrial Products sector that you may want to consider, as our model shows that these have the right combination of elements to come up with an earnings beat:
Flowserve Corporation FLS has a Zacks Rank #2 and an Earnings ESP of +1.72%. You can see the complete list of today's Zacks #1 Rank stocks here .
HD Supply Holdings, Inc. HDS has a Zacks Rank #2 and an Earnings ESP of +1.95%.
Kennametal Inc. KMT has a Zacks Rank #2 and an Earnings ESP of +0.22%.
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Kennametal Inc. (KMT): Free Stock Analysis Report
Flowserve Corporation (FLS): Free Stock Analysis Report
Luxfer Holdings PLC (LXFR): Free Stock Analysis Report
HD Supply Holdings, Inc. (HDS): 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.
