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Will Cintas (CTAS) Keep Its Earnings Streak Alive in Q3?

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Cintas Corporation CTAS is scheduled to release third-quarter fiscal 2021 (ended February 2021) results on Mar 17, before market open.

The company delivered better-than-expected results in the last four quarters, the average earnings surprise being 16.39%. In the last reported quarter, its earnings of $2.62 surpassed the Zacks Consensus Estimate of $2.18 by 20.18%.

In the past three months, shares of the company gained 1.1% compared with the industry’s growth of 3.3%.

Let us see how things have shaped up for Cintas this quarter.

Factors to Affect Q3 Results

The pandemic has adversely impacted Cintas’ results in the past few quarters, with organic sales declining 4.4% year over year in the second quarter of fiscal 2021 (ended November 2020). The trend is expected to have continued in the third quarter. However, the reopening of businesses and clarity, regarding the impacts of the pandemic on operations, are expected to have been reliefs.

Also, the company expected the quarter’s results to reflect the impacts of one less working day as compared with the year-ago quarter. A highly leveraged balance sheet and stiff competition from industry players might have been concerning.

However, a solid customer base and product offerings as well as a sound distribution network and supply chain are expected to have aided the company’s performance. Also, healthy demand for products in the hygiene and healthcare end-markets is expected to have proved advantageous.

For the fiscal third quarter, Cintas predicts revenues of $1.75-$1.76 billion and earnings of $2.15-$2.25 per share. Notably, the company’s revenues and earnings were $1.81 billion and $2.16 in the year-ago quarter.

The Zacks Consensus Estimate of the company’s revenues for the third quarter is pegged at $1,750 million, down 3.4% from the year-ago reported figure and 0.4% below the previous quarter’s number. Meanwhile, the Zacks Consensus Estimate for earnings per share stands at $2.21, suggesting an increase of 2.3% from the year-ago reported number and a sequential decline of 15.6%.

On a segmental basis, the Zacks Consensus Estimate for Uniform Rental and Facility Services’ revenues is pegged at $1,406 million for the fiscal third quarter, indicating a 2.9% decline from the year-ago reported figure and a 0.3% decrease from the previous quarter. First Aid and Safety Services’ revenue estimates are pegged at $190 million, suggesting 11.1% growth from the year-ago quarter and a decrease of 2.1% from the previous quarter. All Other’s revenues are pinned at $149 million, indicating a 22.4% year-over-year decrease and 2% from the previous quarter.

Earnings Whispers

Our proven model provides some idea about the stocks that are about to release their earnings results. Per the model, a stock needs a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The case with Cintas has been provided below.

Earnings ESP: The company has an Earnings ESP of +0.27%, with the Most Accurate Estimate of $2.22 exceeding the Zacks Consensus Estimate of $2.21.

Cintas Corporation Price, Consensus and EPS Surprise

Cintas Corporation Price, Consensus and EPS Surprise
Cintas Corporation Price, Consensus and EPS Surprise

Cintas Corporation price-consensus-eps-surprise-chart | Cintas Corporation Quote

Zacks Rank: Cintas currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies in the Zacks Industrial Products sector that you may want to consider as these too have the right combination of elements, per our model.

Altra Industrial Motion Corp. AIMC presently has an Earnings ESP of +1.10% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Colfax Corporation CFX has an Earnings ESP of +0.52% and a Zacks Rank #3 at present.

Regal Beloit Corporation RBC currently has an Earnings ESP of +0.35% and a Zacks Rank #2.

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