Industrial Stocks' Earnings For Next Week: GK, SITE & More

We believe that economic uncertainties in some developed and emerging nations, soft commodity prices and forex woes played spoilsport for industries like Industrial Products in second-quarter 2016. However, the impact of such headwinds is subdued compared with the previous quarter. In the U.S., roughly 1% year-over-year decline in industrial production is believed to have impacted industrial stocks.

Per our report dated Aug 10, roughly 95.5% of industrial products stocks in the S&P 500 Group came up with results, recording a 1.2% decline in earnings and 4.5% fall in revenue. Considering the prevalent headwinds, earnings for the industrial products stocks in the S&P 500 Group are predicted to decline 4.9%, while revenue will likely fall 5.6%.

What’s in Store for 4 Industrial Stocks, GK, SITE, ALRM, SCSC, for Apr-Jun 2016?

Below we discuss briefly the expectations from the upcoming results (April–June quarter) of four industrial stocks:

G&K Services Inc. (NASDAQ:GK) : The supplier of branded uniform and facility services programs is slated to release its fourth-quarter fiscal 2016 (ended Jun 2016) results on Aug 16, before the market opens. The company recorded better-than-expected results in two of four trailing quarters, while posting in-line results in the other two.

Our proven model does not conclusively show that G&K Services will be able to pull an earnings surprise. For a possible earnings beat, the company should have the right combination of two key ingredients – a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold). Currently, the company carries a Zacks Rank #3 and a 0.00% ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased 1% to 95 cents per share.

SiteOne Landscape Supply, Inc. (NYSE:SITE) : The wholesale distributor of landscape supplies is slated to release its second-quarter 2016 results on Aug 17, before the market opens. Last quarter, the company’s recorded loss of 85 cents per share, wider than the Zacks Consensus Estimate of a loss of 13 cents per share. Average earnings surprise was a negative 553.85%.

Our proven model does not conclusively show that SiteOne Landscape Supply will beat earnings this quarter because it currently carries a Zacks Rank #3 and a -11.54% Earnings ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased 3.7% to 78 cents per share.

Alarm.Com Holdings, Inc. (NASDAQ:ALRM) : The security solutions provider is slated to release its second-quarter 2016 results on Aug 15, after the market closes. In the trailing four quarters, the company lagged estimates in one, while surpassing results in three. Average earnings surprise was a positive 30.56%.

Our proven model does not conclusively show that Alarm.Com Holdings will beat estimates this quarter because it currently carries a Zacks Rank #3 and a 0.00% Earnings ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has remained stable at 10 cents per share. (For more please read: Can Alarm.Com Spring a Surprise in Q2 Earnings?)

ScanSource, Inc. (NASDAQ:SCSC) : The industrial service provider is anticipated to release its fourth-quarter fiscal 2016 (ended Jun 2016) results on Aug 18. Over the four trailing quarters, the company reported lower-than-expected results in one while surpassing estimates in three. Average earnings surprise was a positive 11.46%.

Our proven model does not conclusively show that ScanSource will beat earnings this quarter because it currently carries a Zacks Rank #4 (Sell) and a 0.00% Earnings ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased 1.4% to 72 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 negative estimate revisions.

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