Yahoo Finance Industrial Stocks' Q2 Earnings on Aug 6: BLL, SEE & More
So far, 44.8% of the S&P participants in the Industrial Products sector have reported second-quarter 2020 results — logging a decline of 37.8% in earnings, which highlights the slowdown in industrial production and coronavirus pandemic-hit demand. The sector is anticipated to see a slump of 47.9% in second-quarter earnings, per the latest Earnings Trends. However, the slump is not restricted to this sector alone, as 15 of the 16 Zacks sectors are expected to log declines this season, primarily due to the pandemic.
Factors to Note
Per the Federal Reserve, industrial production contracted at an annual rate of 42.6% in the second quarter — the largest quarterly decrease since the World War II. Factory output slumped 47% at an annual rate in the quarter. Also, per the Institute for Supply Management, the Manufacturing Purchasing Managers’ Index (PMI) came in at 41.5% for April and 43.1% in May. A reading below 50 denotes contraction. Even though the index climbed to 52.6% in June, the manufacturing index averaged 45.7% for the second quarter. These figures clearly indicate that the manufacturing sector has been impacted by the pandemic and energy market volatility in the quarter under review. Consequently, the quarterly results of the industry participants are likely to reflect the same.
Also, second-quarter results are likely to reflect the challenges associated with the pandemic, which include factory closures worldwide owing to restrictions imposed by several governments, supply chain disruptions, and low demand for goods and logistic costs. Capital expenditures in oil & gas, mining and construction are likely to have been restrained. The sector players, which are engaged in packaging for food, medicines, home and personal-care products, might have benefited from higher demand during the pandemic.
To counter the impact of weak demand, many of the sector participants have been focusing on cost cutting measures including reducing discretionary expenses, freezing salary hikes, and lean manufacturing actions. This may have contributed to margin performance in the quarter.
It will be interesting to see how some of the companies belonging to this sector fare when they release quarterly financial numbers on Aug 6.
Ball Corporation BLL is scheduled to report second-quarter 2020 results before the market opens. The company has beat estimates twice in the trailing four quarters, while missing the same in the other two. It has a trailing four-quarter negative earnings surprise of 0.11%, on average.
Ball Corporation Price and EPS Surprise
Ball Corporation price-eps-surprise | Ball Corporation Quote
Per the Zacks quantitative model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ball Corp has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -0.95%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The global beverage-can demand continues to spike as consumers now prefer cans over glass and plastic. Moreover, higher demand for at-home consumption owing to the coronavirus pandemic is likely to have boosted beverage can demand during the second quarter. Further, the company’s results might reflect the positive impact of robust demand for aluminum packaging and solid aerospace backlog. However, impact of the coronavirus pandemic on some of its segments is likely to get reflected in the to-be-reported quarter. (Read more: Ball Corp to Report Q2 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for Ball Corp’s second-quarter 2020 earnings is currently pegged at 57 cents, which indicates a decline of 11% from the year-ago quarter. The estimates for earnings have been revised upward by 2% in the past 30 days.
Sealed Air Corporation SEE is slated to report second-quarter 2020 results before the opening bell. The company has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.93%.
Sealed Air Corporation Price and EPS Surprise
Sealed Air Corporation price-eps-surprise | Sealed Air Corporation Quote
The company currently has a Zacks Rank of 3 and an Earnings ESP of -3.11%.
Elevated demand for packaging of food, beverage and healthcare products, and the e-commerce boom amid the stay-at-home customers on account of the coronavirus crisis might have benefited Sealed Air’s second-quarter performance. Moreover, savings from the company’s Reinvent SEE Strategy and restructuring program are likely to have contributed to the company’s operating margin in the to-be-reported quarter. (Read more: Sealed Air to Report Q2 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for the company’s second-quarter earnings has gone down 5% to 54 cents per share over the past 30 days. The figure suggests a decline of 33% from the prior-year reported figure.
NortonLifeLock, Inc. NLOK is set to report first-quarter fiscal 2021 results after the closing bell. The company has surpassed estimates thrice in the trailing four quarters, while missing the same once. It has a trailing four-quarter earnings surprise of 56.7%, on average.
NortonLifeLock Inc. Price and EPS Surprise
NortonLifeLock Inc. price-eps-surprise | NortonLifeLock Inc. Quote
The company currently has a Zacks Rank #2 and an Earnings ESP of +2.67%.
NortonLifeLock’s fiscal first-quarter performance is anticipated to have benefited from the expansion of its Norton 360 memberships to more countries in the EMEA, Asia Pacific and Latin American regions, in a bid to offer a broader range of cyber safety products. However, the divestment of the company’s enterprise security asset to Broadcom (AVGO) and ID Analytics business to LexisNexis Risk Solutions, part of RELX Plc (RELX), might have resulted in revenue loss, which is likely to have offset the gains. (Read more: NortonLifeLock to Post Q1 Earnings: What to Expect?)
The Zacks Consensus Estimate for fiscal third-quarter earnings is currently pegged at 21 cents, indicating a decline of 51% from the prior-year quarter. The estimates have been revised downward by 5% in the past 30 days.
Parker-Hannifin Corporation PH is scheduled to report fourth-quarter fiscal 2020 results, before market open. The company has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.95%.
ParkerHannifin Corporation Price and EPS Surprise
ParkerHannifin Corporation price-eps-surprise | ParkerHannifin Corporation Quote
The company has a Zacks Rank #3 and an Earnings ESP of +8.53%.
Parker-Hannifin is expected to have benefited from strength in its power, semiconductor, marine and mining end-markets. Also, benefits of the company’s unique Win Strategy and growth-based investments might get reflected in its quarterly results. Further, some of the cost-control actions taken by the company may have contributed to the to-be-reported quarter’s margin. However, challenged end-market conditions amid the coronavirus pandemic, particularly at aerospace, and oil and gas space, are likely to have adversely impacted its top-line performance in the quarter to be reported. (Read more: Parker-Hannifin to Post Q4 Earnings: Is a Beat in Store?)
The Zacks Consensus Estimate for the fiscal fourth-quarter’s earnings is currently pegged at $1.47, suggesting a decline of 56% from the prior-year quarter. Notably, the estimates have been revised upward by 6% in the past 30 days.
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