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Factors Likely to Shape FLIR Systems' (FLIR) Q2 Earnings

Zacks Equity Research

FLIR Systems Inc. FLIR is set to report second-quarter 2019 financial results on Jul 24, before market open. In the trailing four quarters, the company came up with average positive earnings surprise of 6.50%.

Let's take a closer look at the factors influencing FLIR Systems’ quarterly results.

Factors to Consider

Frequent product innovations and bookings leading to solid organic revenue growth usually provide a boost to the company’s top line. Keeping this trend alive, during the second quarter, FLIR System unveiled its handheld thermal imaging camera (TIC), which is the company’s most affordable TIC for first responder officers and fire investigators. The company also introduced TrafiData intelligent thermal traffic sensor solution for improved data collection capabilities to offer transportation management key insights for smarter, safer cities.

Moreover, the company has been witnessing robust bookings for the past couple of quarters. Anticipating a similar trend in the second quarter, we may expect solid bookings to boost the company’s top line. In line with this, the Zacks Consensus Estimate for second-quarter revenues is pegged at $480.2 million, indicating a 6.1% improvement from year-earlier reported number.

In a bid to drive its core and non-core businesses, FLIR Systems consistently banks on acquisitions and strategic investments. However, in the soon-to-be-reported quarter, the company made no notable earnings accretive investments. Moreover, the company has been experiencing declines in its outdoor and tactical systems (OTS) business due to continued restructuring impacts, which in turn might hurt the bottom line. Negative foreign exchange impacts along with U.S. import tariff effects have also been impacting the company’s earnings.

While positive revenue projections can be expected to boost FLIR Systems’ earnings, the aforementioned factors are likely to act as growth inhibitors. Thus, the consensus mark for the company’s second-quarter earnings stands at 55 cents, implying no year-over-year change.

FLIR Systems, Inc. Price and EPS Surprise

FLIR Systems, Inc. Price and EPS Surprise

FLIR Systems, Inc. price-eps-surprise | FLIR Systems, Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that FLIR Systems is likely to beat on earnings in second-quarter 2019. 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 see below. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: FLIR Systems has an Earnings ESP of 0.00%.

Zacks Rank: FLIR Systems currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks That Warrant a Look

Here are some companies in the Zacks Aerospace sector that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Lockheed Martin LMT is scheduled to report second-quarter 2019 results on Jul 23. The company has an Earnings ESP of +0.14% and a Zacks Rank #1.

Moog Inc. MOG.A is expected to report third-quarter fiscal 2019 results on Jul 26. The company has an Earnings ESP of +0.76% and a Zacks Rank #3.

Recent Defense Release

Textron Inc. TXT reported second-quarter 2019 earnings from continuing operations of 93 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 9.4%.

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