Proto Labs (PRLB) to Report Q2 Earnings: What to Expect?
Proto Labs, Inc. PRLB is scheduled to report second-quarter 2018 results on Jul 26, before market open.
In the past four quarters, the company delivered better-than-expected results, with an average positive earnings surprise of 4.06%. In the last reported quarter, its earnings of 71 cents per share exceeded the Zacks Consensus Estimate by 2.90%.
In the past month, the shares of this Zacks Rank #3 (Hold) company have yielded 11.6% return, outperforming an increase of 5% recorded by the industry it belongs to.
Factors to Affect Q2 Results
The need to lower the duration of product development cycles and low-volume production as well as increasing usage of Internet-of-Things devices has been raising demand for custom prototyping and on-demand custom manufacturing in various end-markets including computer electronics, medical and healthcare, industrial machinery and equipment, aerospace and automotive. These aspects are a boon for Proto Labs.
Proto Labs has taken several initiatives like capacity expansion, effective sales and marketing efforts, application of new manufacturing technologies and many more to leverage benefits from a favorable demand trend. The 152,000 square feet manufacturing facility that was added to the company’s portfolio in March 2018 is worth mentioning. The new facility, to be used for CNC machining, will be further expanded by 50,000 sq. ft. and will start commercial production by 2018-end.
Also, the company has been working toward enriching its customer base by adding customers, enhancing businesses with existing customers and expanding its geographical footprint. Buyouts have helped it to reach new markets and strengthen its product portfolio. The acquired assets of Rapid Manufacturing Group (in December 2017) have added steel metal fabrication service to the company’s portfolio while fortifying its capabilities in CNC machining.
On the flip side, any failure in research and development of new products and inability to meet the specific requirements of customers remain concerns for Proto Labs. Also, rising competitiveness among prototype manufacturers, economic turbulence impacting demand for products and rising costs and expenses might be headwinds.
For the second quarter, Proto Labs anticipates revenues to be within $107-$112 million, indicating year-over-year growth of 30-37%. Foreign currency translations are likely to add $2.5-3 million to revenues while Rapid Manufacturing will be a tailwind. In addition, the tax policy changes will benefit the bottom line, which is predicted to be within 69-75 cents per share.
Stocks to Consider
Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Note that we caution against stocks with Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies in the Zacks Industrial Products sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Graco Inc. GGG has an Earnings ESP of +4% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Atkore International Group Inc. ATKR has an Earnings ESP of +1.49% and a Zacks Rank #3.
Rexnord Corporation RXN has an Earnings ESP of +3.74% and a Zacks Rank #3.
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