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Industrial Stocks' Aug 9 Earnings Preview: LABL, CDXS & More

Zacks Equity Research

We believe that during the Apr–Jun ‘16 quarter macro headwinds, including unfavorable foreign currency movements and weak economic conditions in some developed and developing nations, played spoilsport for many industrial stocks. However, the impacts of such adversities are believed to have ebbed compared with the previous quarter.

For the U.S.-based industrial products stocks, the economic conditions of the home-country as well as that of the foreign countries it serves are of utmost importance. In the U.S., one of the leading economic indicators for the industrial stocks - industrial production - fell roughly 1% year over year in the April–June quarter.

As of Aug 5, roughly 95.5% of industrial products stocks in the S&P 500 Group reported results, recording a 1.2% decline in earnings and 4.5% fall in revenue. Considering the prevalent headwinds, earnings for the industrial products stocks in the S&P 500 Group are predicted to decline 4.9%, while revenue will likely fall 5.6%.

What’s in Store for 4 Industrial Stocks, LABL, CDXS, ASCMA, HWCC, for Apr–Jun ‘16 Quarter?

Below we discuss briefly the expectations from the upcoming results (April–June quarter) for four industrial stocks:

Multi-Color Corp. LABL: This industrial company is slated to release its first-quarter fiscal 2017 (ended Jun 2016) results on Aug 9, before the market opens. In the four trailing quarters, the company reported lower-than-expected results in three while recording better-than-expected results in one. Average earnings surprise was a negative 3.52%.

MULTI-COLOR Price and EPS Surprise

MULTI-COLOR Price and EPS Surprise | MULTI-COLOR Quote

Our proven model does not conclusively show that Multi-Color Corp. will be able to pull an earnings surprise. For a possible earnings beat, the company should have the right combination of two key ingredients – a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold). Currently, the company carries a Zacks Rank #3 and a 0.00% ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock remained unchanged at 89 cents per share.

Codexis, Inc. CDXS: This industrial company is slated to release its second-quarter 2016 results on Aug 9, after the market closes. In the four trailing quarters, the company reported better-than-expected results in two while recording in-line results in the rest. Average earnings surprise was a positive 69.55%.

CODEXIS INC Price and EPS Surprise

CODEXIS INC Price and EPS Surprise | CODEXIS INC Quote

Our proven model does not conclusively show that it will beat earnings this quarter because it currently carries a Zacks Rank #4 (Sell) and a +100% Earnings ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has improved from loss per share of 3 cents to earnings of 3 cents per share.

Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Ascent Capital Group, Inc. ASCMA: The industrial company is anticipated to release its second-quarter 2016 results on Aug 9, after the market closes. In the trailing four quarters, the company lagged estimates in two quarters, while recorded in-line results in one. Average earnings surprise was a negative 48.46%.

ASCENT CAP GRP Price and EPS Surprise

ASCENT CAP GRP Price and EPS Surprise | ASCENT CAP GRP Quote

Our proven model does not conclusively show that Ascent Capital Group will beat estimate this quarter because it currently carries a Zacks Rank #3 and a 0.00% Earnings ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has remained stable at a loss of $1.43 per share.

Houston Wire & Cable Company HWCC: The industrial company is slated to release its second-quarter 2016 results on Aug 9, before the market opens. Over the four trailing quarters, the company reported lower-than-expected results in all quarters, with an average earnings surprise of a negative 57.50%.

HOUSTON WIRE&CB Price and EPS Surprise

HOUSTON WIRE&CB Price and EPS Surprise | HOUSTON WIRE&CB Quote

Our proven model does not conclusively show that Houston Wire & Cable Company will beat earnings this quarter because it currently carries a Zacks Rank #3 and a 0.00% Earnings ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has remained stable at 1 cent per share for second-quarter 2016.

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HOUSTON WIRE&CB (HWCC): Free Stock Analysis Report
 
MULTI-COLOR (LABL): Free Stock Analysis Report
 
CODEXIS INC (CDXS): Free Stock Analysis Report
 
ASCENT CAP GRP (ASCMA): Free Stock Analysis Report
 
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