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Industrial Stocks to Watch for Earnings on Apr 21: DOV, PNR & SON

·6 min read

The Industrial Products sector’s first-quarter 2022 performance is likely to reflect benefits from healthy demand on the back of the ongoing expansion in manufacturing activity. Persistent supply chain constraints and labor and logistics challenges in the industry are expected to have impacted production, reducing companies’ ability to meet the high demand levels. Inflationary cost pressure primarily stemming from raw material, energy and freight is likely to have dented margins in the quarter under review.

Per the Federal Reserve, total industrial production increased at an annual rate of 8.1% in the first quarter. Manufacturing output increased at an annual rate of 5.4%. These figures indicate that the expansion witnessed in manufacturing sector since mid-21 has continued in the first quarter of 2022 as well. Therefore, the industry participants are expected to reflect these gains in the March-end quarter results.

Per the latest Earnings Trends report, The Industrial Products sector’s earnings for the first quarter is expected to register 3.9% growth and revenues are expected to increase 10.9%. In fact, the Industrial Products sector is among nine of the 16 Zacks Sectors with a positive earnings growth projection for the quarter.

Overall increasing manufacturing activity is likely to have translated into improved order levels throughout the first quarter for the sector participants. Strong improvement in the U.S. residential construction businesses and the non-residential construction sector might have benefited companies that serve these sectors in the quarter. Recovery in the COVID-impacted markets, such as confectionery, food service and construction products and normalization of demand from the heightened pandemic-induced at-home eating trends are expected to have benefited companies involved in consumer and industrial products packaging. Commodity prices have improved through the quarter, which might have led to improved order levels for companies dealing in mining equipment.

Elevated material costs owing to high demand and tight supply conditions might have marred companies’ margin in the March-end quarter. Current geopolitical uncertainty stemming from the Russia-Ukraine war is expected to have impacted factory productivity and the supply chain, which were already reeling under COVID-19 impacts. These supply chain and capacity challenges have led to higher transportation and labor costs for the sector players, impairing their ability to meet increasing demand. However, several sector participants have been focusing on pricing actions, cost-control actions and productivity improvement, which might have offset the abovementioned headwinds.

Now, it will be interesting to see how some of the companies in this sector fare when they release quarterly numbers on Apr 21.

Dover Corporation DOV is scheduled to report first-quarter 2022 results before the opening bell. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 12.3%.

Per the Zacks quantitative model, 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our proven model doesn’t conclusively predict an earnings beat for Dover this time around. Dover currently has an Earnings ESP of -1.90% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Dover Corporation Price and EPS Surprise

Dover Corporation Price and EPS Surprise
Dover Corporation Price and EPS Surprise

Dover Corporation price-eps-surprise | Dover Corporation Quote

Dover’s first-quarter results will likely reflect robust bookings and order backlog stemming from strong demand across segments. While the impact of material cost inflation, labor shortage and supply chain headwinds might have dented margins, the company’s efforts to boost productivity, cost initiatives and restructuring programs are expected to have offset these headwinds and led to margin expansion in the quarter. (Read more: Dover to Report Q1 Earnings: What's in the Cards?)

The Zacks Consensus Estimate for Dover’s first-quarter earnings has remained unchanged at $1.84 in the past 30 days. It suggests a 1.7% improvement from the prior-year quarter’s levels.

Pentair plc PNR is scheduled to report first-quarter 2022 results before the opening bell. The company has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average positive surprise being 11.5%.

Pentair has an Earnings ESP of +0.00% and a Zacks Rank #3.

Pentair plc Price and EPS Surprise

Pentair plc Price and EPS Surprise
Pentair plc Price and EPS Surprise

Pentair plc price-eps-surprise | Pentair plc Quote

Pentair has been witnessing solid improvement in its residential facing businesses as consumers stayed at home due to the concerns regarding the emergence of different variants of the COVID-19 virus. Thus, they have been investing in pools to enhance their at-home quality of life. Apart from pool construction, the demand for pool maintenance has been strong. The impacts of the robust demand and the near-record backlog at the end of 2021 are likely to get reflected in the first-quarter results. Elevated metals, resins and electronics, and rising logistics costs and supply chain headwinds may have impacted margins in the quarter. (Read more: Pentair to Report Q1 Earnings: What's in the Offing?)

The Zacks Consensus Estimate for Pentair’s first-quarter 2022 earnings is currently pegged at 81 cents. The estimate has remained stable over the past 30 days.

Sonoco Products Company SON is scheduled to release first-quarter 2022 results, before the market open. The company has surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missing once. It has a positive earnings surprise of 1.7%, on average.

SON currently has an Earnings ESP of 0.00% and a Zacks Rank of 2.

Sonoco Products Company Price and EPS Surprise

Sonoco Products Company Price and EPS Surprise
Sonoco Products Company Price and EPS Surprise

Sonoco Products Company price-eps-surprise | Sonoco Products Company Quote

The company’s first-quarter 2022 results are likely to reflect stellar demand in the consumer packaging business, the contribution from the Ball Metalpack acquisition and a strong recovery in price and cost across most of its businesses. Strong demand for global tubes, cores and cones is likely to have aided SON’s industrial-served markets. Escalating costs, foreign currency translation, non-recurring COVID-related incentives and increased SG&A expenses might have negated some of these benefits. (Read more: Sonoco to Report Q1 Earnings: What's in the Cards?)

The Zacks Consensus Estimate for Sonoco’s first-quarter earnings is currently pegged at $1.73, which suggests a growth of 92.2% from the year-ago quarter. The estimate has moved up 35% over the past 30 days.

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Dover Corporation (DOV) : Free Stock Analysis Report

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