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Is Milacron (MCRN) Poised to Beat Earnings Estimates in Q3?

Milacron Holdings Corp.MCRN is scheduled to report third-quarter 2016 results on Nov 1, before the market opens.

Last quarter, Milacron's top and bottom line both improved year over year, surpassing the respective Zacks Consensus Estimate. Let's see how things are shaping up for this quarter.

Earnings Whispers

Our proven model shows that Milacron is likely to beat on earnings because it has the right combination of the two key ingredients.

Positive Zacks ESP : Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +2.63%. This is a meaningful indicator of a likely positive surprise. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: Milacron currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank of #1 (Strong Buy), #2 (Buy) and #3 have a significantly higher chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Milacron's Zacks Rank #3 and an ESP of +2.63% makes us confident in looking for a positive surprise in the upcoming release.

Surprise History

Milacron has a fairly decent earnings surprise history. The company outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average earnings beat of 5.14%.

MILACRON HLDGS Price and EPS Surprise

MILACRON HLDGS Price and EPS Surprise | MILACRON HLDGS Quote

What's Driving the Better-than-Expected Results?

At the second quarter end, Milacron's backlog was $249.9 million, a $38.3 million increase from Dec 31, 2015. The increase was predominantly driven by strength in the North-American equipment. This bodes well for third quarter performance.

Profitability will be supported by both revenue growth and margin expansion in the near term. Revenue growth will come from underlying market growth in key segments, geographic expansion of certain product lines, consistent penetration of hot runners and incremental share gain from new products. New products are focused on solidifying the current market position, expanding addressable market through the introduction of technology that displaces other materials, primarily metal and glass.

Since the past two years, Milacron has undertaken a number of organizational redesign and cost-reduction initiatives to improve its cost structure and operating flexibility. The key drivers leading to the cost reductions include realigning the overall cost structure, consolidating sales offices and call centers along with optimizing the manufacturing footprint. These actions are likely to boost margins.

Stocks to Consider

Milacron is not the only stock looking up this earnings season. Here are some stocks in the industrial products sector that you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:

Casella Waste Systems Inc. CWST has an Earnings ESP of +60.00% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

NN Inc. NNBR has an Earnings ESP of +4.35% and also sports a Zacks Rank #1.

Ball Corporation BLL carries a Zacks Rank #2 and has an Earnings ESP of +5.43%.

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BALL CORP (BLL): Free Stock Analysis Report

NN INC (NNBR): Free Stock Analysis Report

CASELLA WASTE (CWST): Free Stock Analysis Report

MILACRON HLDGS (MCRN): 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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