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Fortive (FTV) to Benefit From Acquisitions in Q4 Earnings

Zacks Equity Research

Fortive Corporation FTV is slated to report fourth-quarter 2018 results on Feb 7.

The company topped the Zacks Consensus Estimate in the trailing four quarters, recording average of 2.63%.

In the last reported quarter, Fortive delivered a negative earnings surprise of 2.27%. Earnings of 86 cents per share increased 11.7% year over year but decreased 5.5% sequentially.

Revenues grew 9.2% year over year but decreased 0.9% sequentially to $1.84 billion. The figure missed the Zacks Consensus Estimate of $1.86 billion.

Robust product portfolio, solid momentum across all its platforms and benefits from acquisitions drove top-line growth on a year-over-year basis.

For fourth-quarter 2018, Fortive anticipates adjusted net earnings between 83 cents and 87 cents per share. The Zacks Consensus Estimate for earnings is pegged at 86 cents per share.

Further, the Zacks Consensus Estimate for revenues is pegged at $1.76 billion.

Let’s see how things are shaping up for the upcoming quarterly results.

Acquisitions & Portfolio Strength — Key Catalysts

Fortive’s strong endeavors toward innovation and expansion of its key offerings on the back of strong and accretive acquisitions will continue to drive top-line growth.

The company’s acquisitions of eMaint, Orpak, Landauer and Industrial Scientific, which have aided the expansion of Fortive’s product portfolio, are expected to drive core revenues in the to-be-reported quarter.

Recently, the company closed the Gordian and Accruent buyouts. In addition, it closed the divestiture of the automation and specialty businesses to Altra. This expanded the solutions portfolio of the company, which, in turn, is likely to aid fourth-quarter results.

Further, Fortive’s robust Fluke, Tektronix, Jacobs Vehicle Systems, Gilbarco Veeder-Root and sensing technologies are expected to have aided its performance across the globe in the fourth quarter.

Additionally, Tektronix 5 Series mixed-signal oscilloscope has gained traction and should continue to expand Fortive’s market share.

Other Factors

Fortive’s segments, Professional Instrumentation and Industrial Technologies, generated revenues of $894.1 million and $946 million, respectively, in the last reported quarter.

The Zacks Consensus Estimate for revenues from both the segments for the to-be-reported quarter is pegged at $1,021 million and $742 million, respectively.

Comparing the estimates with the year-ago figures, Professional Instrumentation exhibits growth of 13.6% and Industrial Technologies displays an improvement of 5.3%.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Fortive currently has a Zacks Rank #3 (Hold) and an Earnings ESP of -1.90%. Hence, our proven model indicates that the company is unlikely to beat estimates in the fourth quarter.

Fortive Corporation Price and EPS Surprise

 

Fortive Corporation Price and EPS Surprise | Fortive Corporation Quote

Stocks That Warrant a Look

Here are a few stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Vipshop Holdings Limited VIPS has an Earnings ESP of +5.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Square, Inc. SQ has an Earnings ESP of +6.06% and a Zacks Rank #2.

Gogo Inc. GOGO has an Earnings ESP of +9.46% and a Zacks Rank #2.

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