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Machinery Stocks' Q4 Earnings on Jan 25: ITW, ROK & BGG

The fourth-quarter 2016 earnings season has given a robust start, with 63 S&P 500 companies having already reported results till Jan 20, 2017. We notice that the top- and bottom-line growth figures are on the trail to reach their topmost level in eight quarters.

Pro-growth policies of Trump, such as slashing tax rates and raising government spending, would likely enhance infrastructure and industrial spending in the U.S. This, along with the recovering Chinese economy, is anticipated to bolster sales of machinery stocks.

Nevertheless, the time isn't ripe to draw any concrete conclusion, as we have just entered into the heart of the Q4 earnings this week, with more than 300 companies releasing quarterly results, including almost 105 S&P 500 members.

According to the Zacks Industry classification, the machinery industry is broadly grouped under Industrial Products, one of the 16 Zacks sectors.

Below we briefly discuss the broader sectors' earnings trend for the Oct-Dec 2016 quarter.

Our latest Earnings Preview article (released on Jan 20, 2017) states that roughly 4.5% of the Industrial stocks in the S&P 500 Group have reported results for this quarter, recording 9.6% rise in earnings and 6.4% upside in revenues on a year-over-year basis.

However, we predict that earnings of all the industrial stocks in the S&P 500 Group will decline 1.3% year over year. However, revenues are expected to climb 4.3% over the same time frame.

What Awaits these 3 Machinery Stocks?

Illinois Tool Works Inc.ITW is slated to report fourth-quarter and full-year 2016 results on Jan 25, before the market opens. The company's average positive earnings surprise for the last four quarters is 2.25%. Our proven model does not conclusively show that Illinois Tool Works will 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. That is not the case here as we will see below.

This Zacks Rank #2 company has an Earnings ESP of 0.00%, as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of $1.37. This makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Illinois Tool Works is poised to grow on the back of its Enterprise Strategy, new growth programs and robust capital allocation schemes. However, headwinds such as unfavorable foreign exchange movements, might limit growth. (Read more: Illinois Tool to Report Q4 Earnings: What's in Store? )

Over the last seven days, the Zacks Consensus Estimate for the stock remained unchanged at $1.37, for the quarter to be reported.

Illinois Tool Works Inc. Price, Consensus and EPS Surprise

Illinois Tool Works Inc. Price, Consensus and EPS Surprise | Illinois Tool Works Inc. Quote

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

Rockwell Automation Inc.ROK is scheduled to report first-quarter fiscal 2017 (ended Dec, 2016) results on Jan 25, before the market opens. The company's average positive earnings surprise for the trailing four quarters is 5.79%.

Our proven model does not conclusively show that Rockwell Automation will beat estimates in this quarter. The stock carries a favorable Zacks Rank #3, but has an Earnings ESP of -2.76%, as the Most Accurate estimate of $1.41 per share is below the Zacks Consensus Estimate of $1.45.

However, over the last seven days, the Zacks Consensus Estimate for the stock moved north by 0.7% to $1.45 for the quarter to be reported. The company believes that improving automotive and consumer verticals' business would boost its top and bottom line in the to-be-reported quarter. However, persistent weaknesses prevailing in the mining industry or other currency related headwinds might restrict growth. (Read More: Rockwell Automation Q1 Earnings: What's in Store? )

Rockwell Automation, Inc. Price, Consensus and EPS Surprise

Rockwell Automation, Inc. Price, Consensus and EPS Surprise | Rockwell Automation, Inc. Quote

Briggs & Stratton CorporationBGG is set to report second-quarter fiscal 2017 (ended Dec 2016) on Jan 25, after the market closes . The company has an average positive earnings surprise of 20.02% for the last quarters. Our proven model does not conclusively show that Briggs & Stratton Corporation will beat estimates in this quarter. The stock currently carries a Zacks Rank #4 (Sell) and has a 0.00% Earnings ESP, making surprise predictions indecisive. Both Most Accurate Estimate and Zacks Consensus Estimate for the stock are currently pegged at 29 cents per share.

Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

However, over the last seven days, the Zacks Consensus Estimate for Briggs & Stratton Corporation remained unchanged at 29 cents, for the fourth quarter.

Briggs & Stratton Corporation Price, Consensus and EPS Surprise

Briggs & Stratton Corporation Price, Consensus and EPS Surprise | Briggs & Stratton Corporation Quote

Don't miss on our full earnings release articles for these three machinery stocks, as the actual results might hold some surprises!

Zacks' Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?

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Rockwell Automation, Inc. (ROK): Free Stock Analysis Report

Briggs & Stratton Corporation (BGG): Free Stock Analysis Report

Illinois Tool Works Inc. (ITW): 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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