Machinery Stocks' Aug 9 Earnings Preview: ZBRA, LXFR & More

We are now on the last leg of the earnings season, with almost 1000 companies having released their numbers last week. With macroeconomic conditions still soft, earnings growth is projected to be negative for 7 of the 16 Zacks sectors (as of Aug 4). Further, growth for the benchmark S&P 500 index is on track to be in the red for the fifth quarter in a row.

As of Aug 4, we had results from 414 S&P 500 members (accounting for 85.2% of the index’s total market capitalization), of which about 70.3% have posted earnings beats and 51.9% trumped top-line estimates.

On the whole, our latest data projects that earnings for S&P 500 companies are now on track to decline 3.1% from the year-ago period, on 0.4% lower revenues. This is comparable to a decline of 6.2% expected earlier this season. This change hints toward some tell-tale signs of improvement in the overall earnings picture. (For more details, Read our latest Earnings Trends article)

The industrial products sector is one of those sectors which are expected to chart negative earnings growth this quarter. According to our latest numbers, its earnings are on track to contract 4.9% in the quarter, on 5.6% lower sales compared with the last year. Notably, the sector had witnessed a decline of 21.6% and 7.9% in earnings and revenues, respectively, in the previous quarter.

Let’s have a look at how some machinery players within the sector, like Luxfer Holdings PLC (NYSE:LXFR) , Zebra Technologies Corporation (NASDAQ:ZBRA) , The ExOne Company (NASDAQ:XONE) and Twin Disc, Incorporated (NASDAQ:TWIN) , are poised ahead of their scheduled announcements tomorrow.

Luxfer Holdings: This materials technology company specializes in the design, manufacture and supply of high-performance materials, components and gas cylinders. It caters to environmental, healthcare, protection, and specialty end-markets in Europe, North America, Asia, and internationally.

Luxfer Holdings has a dull earnings history, with one miss and one beat over the trailing four quarters, for a modest average negative surprise of 0.7%. In the last reported quarter, the company delivered a positive earnings surprise of 3.7%.

Our proven model does not conclusively show that Luxfer Holdings is likely to beat on earnings this quarter. This is because the company has an Earnings ESP of 0.00%. The Zacks Consensus Estimate for the stock stands at 29 cents per share for the quarter. The company carries a Zacks Rank #2 (Buy). Though a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the predictive power of ESP, a 0.00% Earnings ESP makes surprise prediction difficult.

Zebra Technologies: This company manufactures and supports a broad range of direct thermal and thermal transfer bar code label printers, receipt printers, instant-issuance plastic card printers and secure identification printing systems, related accessories, and support software.

Zebra Technologies’ earnings history is a mixed bag. It beat the Zacks Consensus Estimate in two of the trailing four quarters, while missing in the other two, with an average negative surprise of 3.3%. In the last reported quarter, the company delivered a negative earnings surprise of 25.2%.

Our proven model does not conclusively show that Zebra Technologies is likely to beat on earnings in the to-be-reported quarter. This is because the company carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. The Zacks Consensus Estimate for the quarter is pegged at 91 cents.

ExOne: This company provides three-dimensional printing machines and printed products to industrial customers primarily in North America, Europe, and Asia.

The company had a choppy earnings history over the trailing four quarters, with three huge misses and one beat, for a significant average negative surprise of 114.67%. In the last reported quarter, the company missed estimates by 29.6%.

Our proven model does not conclusively show that ExOne is likely to beat on earnings in the to-be-reported quarter. This is because the company carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. The Zacks Consensus Estimate for the quarter is pegged at a loss of 27 cents.

Twin Disc: This company designs, manufactures and sells heavy duty off-highway power transmission equipment globally.

The company has recorded a bleak surprise history over the trailing four quarters, with three huge misses and one beat, for an average negative surprise of 223.4%. The company posted a positive surprise of 43.8% in the last reported quarter.

Our proven model does not conclusively show that Twin Disc is likely to beat on earnings in the to-be-reported quarter. The company presently has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at a loss of 16 cents.

Keep an eye on our full earnings articles to see how these players finally fared in quarter.