Milacron (MCRN) Q2 Earnings: What's In Store For The Stock?

Milacron Holdings Corp. (NYSE:MCRN) is scheduled to report second-quarter 2016 results on Jul 28, before the market opens.

Last quarter, Milacron’s adjusted earnings came in line with the Zacks Consensus Estimate. The company reported year-over-year growth in top line in the first quarter. Let’s see how things are shaping up for this quarter.

Factors to Consider

In the first quarter, new orders stood at $291.8 million, a 2.3% fall from the prior-year quarter. Excluding $6.9 million of unfavorable effects of foreign currency movements, new orders were flat compared to the prior period. They were primarily hurt by an increase in European equipment business, offset by lower demand volumes for mold bases. These will, in turn, hurt Milacron’s revenues in the second quarter.

Further, the company’s Advanced Plastic Processing Technologies segment could remain partially under pressure as volumes remain sluggish, pricing competition sustains and internal investments continue. The Melt Delivery and Control Systems segment will remain fairly stable sequentially, though the timing of results may be difficult to predict as the business is fairly short cycled and customer deferrals may increase if uncertainty mounts regarding the business cycle.

Moreover, given its sizeable international operations, currency translation risk and supply disruptions remain matters of concerns for Milacron.

Earnings Whispers

Our proven model does not conclusively show that Milacron will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 38 cents.

Zacks Rank: Milacron has Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Ranks #4 or #5 (Sell-rated stocks) going into the earnings announcement.

Milacron has a Zacks Rank #4, which along with a 0.00% ESP, makes an earnings beat unlikely this season.

Surprise History

Milacron has outpaced the Zacks consensus estimate in two of the trailing four quarters, with an average earnings beat of 15.27%.

Stocks to Consider

Here are some stocks worth considering, as according to our model they have the right combination of elements to post an earnings beat this quarter.

Allegion Plc (NYSE:ALLE) has an Earnings ESP of +2.25% and a Zacks Rank #2.

Ball Corp. (NYSE:BLL) has an Earnings ESP of +1.01% and a Zacks Rank #3.

Colfax Corp. (NYSE:CFX) has an Earnings ESP of +2.56% and a Zacks Rank #3.