Will Low-Demand Dampen Stanley Black's (SWK) Q2 Earnings?
Stanley Black & Decker, Inc. SWK is scheduled to release second-quarter 2023 results on Aug 1, before market open.
The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters, while missing in one. The average beat was 25.3%.
Let’s see how things have shaped up for Stanley Black this earnings season.
Stanley Black & Decker, Inc. Price and EPS Surprise
Stanley Black & Decker, Inc. price-eps-surprise | Stanley Black & Decker, Inc. Quote
Factors to Note
Stanley Black’s second-quarter performance is likely to have been hurt by a decline in volumes due to a soft demand environment. Given the company’s substantial international operations, adverse foreign currency movements might have dampened its revenues. We expect the company’s total revenues to decline 6.7% from the year-ago reported figure.
Reduced retail and consumer demand within the Power and Hand Tools division is expected to have weighed on the Tools & Outdoor segment’s revenues in the to-be-reported quarter. Our estimate for Tools & Outdoor segment revenues indicates a 7.5% decline from the year-ago reported figure.
Softer industrial markets are expected to have hurt the Industrial segment’s performance in the to-be-reported quarter. We expect the segment’s revenues to dip 2.6% from the year-ago reported figure.
However, pricing actions, productivity gains and strength in aerospace and auto markets are likely to have supported Stanley Black’s second-quarter performance. Cost-control initiatives are expected to have aided its bottom line and supported margins.
What Does the Zacks Model Say
Our proven model does not conclusively predict an earnings beat for Stanley Black 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, which is not the case here, as elaborated below.
Earnings ESP: Stanley Black has an Earnings ESP of -0.18%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Stanley Black presently carries a Zacks Rank #3.
Highlights of Q1 Earnings
Stanley Black incurred a loss of 41 cents per share in the first quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of 73 cents. In the year-ago quarter, the company reported earnings of $2.10 per share. Net Sales of $3,931.8 million declined 11.6% year over year, missing the Zacks Consensus Estimate of $4,002 million.
Stocks to Consider
Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Emerson Electric Co. EMR has an Earnings ESP of +2.35% and a Zacks Rank #2. The company is scheduled to release third-quarter fiscal 2023 (ended Jun 30, 2023) results on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Emerson pulled off a trailing four-quarter earnings surprise of 4.5%, on average. The stock has gained 5.5% in the past three months.
Allegion plc ALLE has an Earnings ESP of +3.94% and a Zacks Rank #3. The company is slated to release second-quarter 2023 results on Jul 26.
Allegion delivered a trailing four-quarter earnings surprise of 12.5%, on average. The stock has rallied 17.7% in the past three months.
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Emerson Electric Co. (EMR) : Free Stock Analysis Report
Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report
Allegion PLC (ALLE) : Free Stock Analysis Report
