Arconic (ARNC) To Report Q3 Earnings: Is A Beat In Store?

Arconic Inc. (NYSE:ARNC) is scheduled to come up with third-quarter 2019 results before the opening bell on Nov 5. The company is likely to have gained from strength across its key end-markets, especially aerospace, automotive and commercial transportation, and its actions to improve its operations in the quarter.

Arconic beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, the company delivered an average positive surprise of around 10%.

Arconic's shares have rallied around 62.9% year to date, outperforming the roughly 15% rise recorded by the industry.

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

Zacks Model

Our proven model predicts an earnings beat for Arconic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat. That is the case here, as you will see below:

Earnings ESP: Earnings ESP for Arconic is +1.42%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 54 cents and 53 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Arconic currently carries a Zacks Rank #3.

What do the Estimates Say?

Arconic, in August, said that it expects adjusted earnings for the third quarter to be in the range of 47-53 cents.

The Zacks Consensus Estimate for revenues for Arconic for the third quarter stands at $3,602 million, reflecting an expected year-over-year growth of 2.2%.

Some Factors to Consider

Arconic remains focused on cost reduction and operational improvements across its businesses. These actions are expected to have provided support to its bottom line in the September quarter. The company is also expected to have gained from favorable pricing in the quarter.

Higher volumes across major end-markets are also likely to have contributed to organic revenue growth in the third quarter. The company is expected to have benefited from strong demand across automotive and aerospace markets in the quarter.

Arconic is seeing strength in aero engines and aero defense, as reflected by strong organic revenues in these markets. Higher volumes in the commercial transportation market is also likely to have contributed to its top-line growth in the September quarter.

However, headwind from costs associated with fire at Arconic’s fastener plant in France might reflect on third-quarter results. The company expects an unfavorable impact of around $5-$10 million associated with the incident in the third quarter.

Other Stocks That Warrant a Look

Here are some companies 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:

Kinross Gold Corporation (NYSE:KGC) , scheduled to release earnings on Nov 6, has an Earnings ESP of +2.50% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada Corporation (TSX:FNV) scheduled to release earnings on Nov 11, has an Earnings ESP of +0.34% and carries a Zacks Rank #1.

Sealed Air Corporation (NYSE:SEE) , scheduled to release earnings on Nov 6, has an Earnings ESP of +2.40% and carries a Zacks Rank #3.

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