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Milacron (MCRN) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

Milacron Holdings Corp. MCRN is scheduled to report third-quarter results before the opening bell on Nov 12.

The company has an impressive earnings history. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 11.18%.

Milacron’s second-quarter 2019 adjusted earnings per share of 34 cents fell 26% year over year. Sales in the second quarter declined 11% to $271 million.

Milacron Holdings Corp. Price and EPS Surprise

 

Milacron Holdings Corp. Price and EPS Surprise

Milacron Holdings Corp. price-eps-surprise | Milacron Holdings Corp. Quote

Q3 Estimates

The Zacks Consensus Estimate for third-quarter revenues is pegged at $289 million, indicating a decline of 6.24% from the year-ago quarter. The same for third-quarter earnings stands at 35 cents, indicating a decline of 18.6% from the prior-year reported figure. The figure has remained stable over the past 30 days.

Factors to Consider

The company has been witnessing a slowdown in order levels as global trade uncertainty has been weighing on customer decisions. Further, softness in the automotive market is likely to have dampened the company’s top line in the third quarter.

The imposition of tariffs on steel prices is anticipated to have affected Milacron’s margins, with  Advanced Plastic Processing Technologies segment having borne the brunt of it. The Zacks Consensus Estimate for the segment sales is pegged at $140 million for the third quarter, indicating a decline of 16% year-ago reported figure. The consensus mark for the segment’s operating profit stands at $17.31 million, suggesting a decline of 23% from $22.6 million in the prior-year quarter.

The Zacks Consensus Estimate for Milacron’s Melt Delivery and Control Systems segment sales is pegged at $104 million for the third quarter, suggesting a decline of 5% prior-year quarter. The Zacks Consensus Estimate for the segment’s operating profit stands at $29.75 million, indicating a decline of 10% year-ago comparable period.

A slowdown in industrial production in the third quarter is anticipated to get reflected in Milacron’s Fluids segment’s third-quarter revenues. The Zacks Consensus Estimate for Fluids segment revenues is pegged at $32.9 million, indicating an improvement of 1% from the year-ago quarter. The consensus mark for operating profit for the segment stands at $6.75 million, suggesting a decline of 9% from the prior-year quarter.

However, the company’s efforts to negate the impact of tariffs by focusing on pricing actions, negotiations with existing vendors and making supply chain modifications is likely to have positively impacted the third-quarter performance.

What Our Model Indicates

Our proven model does not conclusively predict a beat for Milacron this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here as you will see below.

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

Earnings ESP: Milacron’s Earnings ESP is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Share Price Performance

Over the past year, Milacron’s shares have gained 22% compared with industry’s growth of 3.7%.

Stocks to Consider

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

Jacobs Engineering Group Inc. JEC has an Earnings ESP of +1.56% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target Corporation TGT has an Earnings ESP of +1.69% and a Zacks Rank of 2.

Horizon Global Corporation HZN has an Earnings ESP of +22.22% and a Zacks Rank of 2.

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