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What's in the Cards for Badger Meter (BMI) in Q4 Earnings?

Badger Meter, Inc.BMI is set to report fourth-quarter 2017 results on Feb 6, after the closing bell. In the last reported quarter, the company's earnings declined 10% year over year despite a rise of 4% in revenues due to elevated brass costs and other costs.

The company reported a negative earnings surprise of 22.9% in the last quarter. It has witnessed an average negative earnings surprise of 3.33% in the trailing four quarters.

Let's see how things are shaping up for this announcement.

Factors to Consider

Badger Meter is poised to gain from significant rebound in the Flow Instrumentation business, driven both by continued improvement in the oil and gas markets, along with the impact of sales channel reorganizations. The company continues to implement price increases to offset expected escalation in resin prices due to the impacts of Hurricane Harvey on resin producers in the Houston area. It projects that the strength of the latest products and the rebound in industrial markets, including oil and gas, remain tailwinds which are likely to bolster sales.

However, elevated copper prices will dent margins in the quarter. Further, delayed orders of the ORION Cellular LTE endpoint is likely to dent municipal water sales in the to-be-reported quarter.

Badger Meter, Inc. Price and EPS Surprise

Badger Meter, Inc. price-eps-surprise | Badger Meter, Inc. Quote

Why a Likely Positive Surprise?

Our proven model shows that Badger Meter is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) to beat estimates, and Badger Meter has the right mix.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks ESP: The Earnings ESP, which represents the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +2.86%. This is a meaningful and leading indicator of a likely positive surprise.

Zacks Rank: Badger Meter's Zacks Rank #2 further increases the predictive power of ESP and makes us reasonably confident of a positive surprise this season.

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.

Share Price Performance

We note that over the past year, Badger Meter has outperformed the industry with respect to price performance. The stock gained around 26% while the industry advanced 12%.

Other Stocks to Consider

Here are some companies in the broader industrial products sector that have the right combination of elements to post an earnings beat this quarter:

Lincoln Electric Holdings, Inc.LECO , with an Earnings ESP of +1.42% and a Zacks Rank #2. The company's shares have gained 19% in a year. You can see the complete list of today's Zacks #1 Rank stocks here .

Milacron Holdings Corp.MCRN , with an Earnings ESP of +1.52% and a Zacks Rank #2. Its shares have appreciated 13% in a year's time.

The Timken CompanyTKR , with an Earnings ESP of +0.99% and a Zacks Rank #2. Its shares have gained 19% in the past year.

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Badger Meter, Inc. (BMI): 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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