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Fortive (FTV) Gears Up for Q2 Earnings: What's in the Cards?

Zacks Equity Research
·4 mins read

Fortive Corporation FTV is slated to report second-quarter 2020 results on Jul 28. In the last reported quarter, the company delivered an earnings surprise of 2.8%.

It topped the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average earnings surprise of 2.5%.

Second-Quarter Estimates

Fortive did not provide any guidance for the June quarter due to risks and uncertainties related to the COVID-19 crisis. The Zacks Consensus Estimate for earnings is currently pegged at 58 cents per share, indicating a decline of 35.6% from the year-ago quarter.

The Zacks Consensus Estimate for revenues is pegged at $1.53 billion, indicating a decline of 18.1% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Fortive Corporation Price and EPS Surprise

Fortive Corporation Price and EPS Surprise
Fortive Corporation Price and EPS Surprise

Fortive Corporation price-eps-surprise | Fortive Corporation Quote

Performance in the Last Reported Quarter

Fortive reported first-quarter 2020 non-GAAP earnings of 74 cents per share, outpacing the Zacks Consensus Estimate by 2 cents. The figure increased 7.2% from the year-ago quarter but decreased 28.2% on a sequential basis.

Revenues increased 7.6% year over year but decreased 14.4% sequentially to $1.7 billion. Core revenues declined 3.8% from the year-ago quarter.

Acquisitions & Portfolio Strength — Key Catalysts

Fortive has made strong endeavors toward innovation and expansion of key offerings on the back of strong and accretive acquisitions. Acquisitions are expected to have driven its performance in the to-be-reported quarter.

Medical sterilization has really taken off amid the coronavirus pandemic. The demand for the company’s Advanced Sterilization Products is expected to have benefited top-line growth.

During the quarter, its Advanced Sterilization Products received an Emergency Use Authorization from the U.S. Food and Drug Administration for the use of STERRAD systems to decontaminate compatible N95 respirators, which is a major positive.

In addition, the company’s leaner cost structure, along with tariff mitigation efforts, continued strong pricing, disciplined cost and supply chain management are expected to have helped margins to expand in the to-be-reported quarter.

Strength in the Professional Instrumentation segment — driven by acquisitions — is anticipated to be reflected in the upcoming quarterly results. However, unfavorable foreign exchange rates could impact the results in this segment. The Zacks Consensus Estimate for revenues from Professional Instrumentation is pegged at $899 million, indicating a 18.6% year-over-year decrease.

The Zacks Consensus Estimate for revenues from the Industrial Technologies segment for the to-be-reported quarter is pegged at $590 million, suggesting a 3.1% year-over-year decline.

However, higher expenses incurred for these acquisitions and integration issues may negatively impact the upcoming quarterly results.

Earnings Whispers

Our proven model predicts an earnings beat for Fortive this time around. 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. That is the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of +4.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Fortive has a Zacks Rank #2.

Other Stocks That Warrant a Look

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

NXP Semiconductors N.V. NXPI has an Earnings ESP of +11.90% and holds a Zacks Rank of 2.

Etsy, Inc. ETSY has an Earnings ESP of +10.98% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Intel Corporation INTC has an Earnings ESP of +3.13% and a Zacks Rank #2.

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