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Mettler-Toledo (MTD) to Post Q3 Earnings: What's in Store?

Zacks Equity Research

Mettler-Toledo International, Inc. MTD is scheduled to report third-quarter 2019 results on Nov 7.

For third-quarter 2019, Mettler-Toledo anticipates sales growth between 4% and 5% in local currency. The Zacks Consensus Estimate for sales is pegged at $753.9 million.

Adjusted earnings are expected in the range of $5.65-$5.75 per share, suggesting growth of 10-12% from the year-ago quarter. The Zacks Consensus Estimate for earnings is pegged at $5.71 per share.

Notably, the company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 1.65%.

In the second quarter, the company reported adjusted earnings of $5.16 per share, which beat the Zacks Consensus Estimate by 1.38%. The figure surged 11% on a year-over-year basis.

Net sales of $731.4 million were up 1.3% year over year. However, the top line missed the Zacks Consensus Estimate of $736.34 million.

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Key Factors to Consider

Mettler-Toledo’s strong product pipeline, which includes robust analytical instruments, balances and auto-chem, are expected to have driven sales in the third quarter. Additionally, positive contributions from strategic acquisitions are likely to have impacted the third-quarter performance.

Further, the company’s Laboratory and Industrial segments are expected to have performed well in the quarter under review, due to favorable market demand conditions.

Laboratory Instruments: The company’s investments in product portfolio expansion, field force, Spinnaker sales and marketing programs are likely to have driven sales growth in this segment. Further, growing R&D activities are anticipated to have negatively impacted the segment’s third-quarter performance.

The Zacks Consensus Estimate for sales in Laboratory segment is pegged at $404 million, indicating an improvement of 9.5% from the year-ago reported figure.

Industrial Instruments: Mettler-Toledo’s solid momentum across core industrial business is likely to have driven the segment’s sales in the third quarter. However, softness in product inspection business of the company owing to sluggishness in Europe is likely to get reflected in the segment’s third-quarter performance.

Nevertheless, strong endeavors toward strengthening are also expected to have contributed to the third quarter performance. Notably, the Zacks Consensus Estimate for sales in Industrial segment is projected at $305 million, remaining flat on a year-over-year basis.

Retail: This segment is comprised of food retail business. However, weak momentum in this business is likely to have affected the company’s top line in the third quarter.

The Zacks Consensus Estimate for sales in Retail segment is projected at $53 million, suggesting a decline of 12.6% from the prior-year quarter.

Additionally, tariff imposition as a result of the U.S.-China trade war is likely to have impacted the company’s export-import activities in China in the third quarter. This is expected to get reflected in the company’s third-quarter results.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Mettler-Toledo 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. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Mkettler-Toledo has an Earnings ESP of +0.35% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are a few stocks that you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Activision Blizzard, Inc ATVI has an Earnings ESP of +24.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eyenovia, Inc. EYEN has an Earnings ESP of +10.51% and a Zacks Rank #2.

iHeartMedia, Inc. IHRT has an Earnings ESP of +3.17% and a Zacks Rank #2.

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