Milacron Holdings (MCRN) Q1 Earnings: What's In Store?

Milacron Holdings Corp. (NYSE:MCRN) is set to release first-quarter 2016 results before the opening bell on May 5. In the last reported quarter, Milacron reported adjusted earnings per share of 48 cents, a 13% decline year over year. Let's see how things are shaping up for this announcement.

Cincinnati, OH-based Milacron makes engineered and customized systems within the plastic technology and processing industry in North America, Europe, Asia and internationally.

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. This is not the case here as you will see below.

Zacks ESP: Milacron’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 27 cents.

Zacks Rank: Milacron carries a Zacks Rank #3 (Hold) increases the predictive power of ESP. However, a 0.0% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Surprise History

In the last quarter, the company posted a positive earnings surprise of 20.00%. In the past three quarters, the company managed to beat the Zacks Consensus Estimate on 2 occasions. The company has an average positive surprise of 20.36%.

Factors to Consider

The weak economic environment continues to impact Milacron’s industrial end-markets. The company meanwhile remained focused on executing its strategic fundamentals, which include reducing its cost structure and optimizing its global manufacturing footprint. Milacron has lately introduced new products which have met with success, enabling it to grow share in existing markets, defend share and grow addressable markets with disruptive technology and unique offerings.

Milacron’s demand will continue to be affected by cyclical trends in client capital expenditures, industrial production and construction activity. Further, free cash flow will be constrained by higher working capital needs and the capital investment required for restructuring its European manufacturing footprint.

Moreover, the first quarter is seasonally lower for Milacron. Typically, the company witnesses substantial order build-up at the beginning part of the year, however, the actual sales activity and earnings activity gets reflected in the ensuing quarters.

Stocks That Warrant a Look

Here are some stocks in the industrial products space that you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Vertex Energy, Inc. (NASDAQ:VTNR) has an Earnings ESP of +13.04% and a Zacks Rank #3.

Nordson Corp. (NASDAQ:NDSN) has an Earnings ESP of +3.26% and a Zacks Rank #3.

Regal Beloit Corp. (NYSE:RBC) has an Earnings ESP of +0.92% and a Zacks Rank #2.