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Eaton (ETN) to Report Q1 Earnings: What's in the Offing?

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Zacks Equity Research
·3 min read
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Eaton Corporation ETN is scheduled to release first-quarter 2020 earnings on Apr 30, before market open. This power management company delivered a negative earnings surprise of 2.1% in the last reported quarter.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

During the quarter, the company sold the Lighting Business and acquired Power Distribution, Inc. Acquisitions are expected to contribute 2% to first-quarter earnings. Share buybacks of Eaton are likely to have boosted earnings.

As the company plays an important role in ensuring critical power supply, it took initiatives to carry out operations and keep employees safe in this unprecedented crisis created by the outbreak of COVID-19.

However, weakness in some end-market conditions is likely to have impacted organic revenue growth in the to-be-reported quarter. As a consequence, organic revenues are expected to decline 3% in the quarter.

Q1 Expectations

Eaton expects first-quarter earnings per share in the range of $1.16-$1.26. The Zacks Consensus Estimate for the quarter is pegged at $1.06 per share, which indicates a decline of 15.9% from the year-ago reported number.

What Our Model Unveils

Our proven model does not conclusively predict an earnings beat for Eaton this time around. A stock needs to have both a positive Earnings ESP (which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass estimates. That is not the case here as you will see below.

Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC Price and EPS Surprise
Eaton Corporation, PLC Price and EPS Surprise

Eaton Corporation, PLC price-eps-surprise | Eaton Corporation, PLC Quote

Earnings ESP: The company’s Earnings ESP is -1.23%.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Eaton carries a Zacks Rank #4 (Sell).

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to post an earnings beat this time around.

Intellicheck, Inc. IDN is slated to release first-quarter 2020 results on May 6. It has an Earnings ESP of +66.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

TPI Composites, Inc. TPIC is slated to release first-quarter 2020 results on May 7. It has an Earnings ESP of +74.55% and a Zacks Rank #2.

Casella Waste Systems, Inc. CWST is slated to release first-quarter 2020 results on May 7. It has an Earnings ESP of +66.67% and a Zacks Rank #3.

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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
 
Casella Waste Systems, Inc. (CWST) : Free Stock Analysis Report
 
TPI Composites, Inc. (TPIC) : Free Stock Analysis Report
 
Intellicheck Mobilisa, Inc. (IDN) : Free Stock Analysis Report
 
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