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Will Stanley Black & Decker (SWK) Post Upbeat Q4 Earnings?

Zacks Equity Research

Stanley Black & Decker, Inc. SWK is slated to report fourth-quarter 2019 results on Jan 29, before the market opens.

The company beat earnings estimates in three of the last four quarters, while recording in-line results in one. Earnings surprise was a positive 9.71%, on average. Notably, the company’s third-quarter 2019 earnings of $2.13 per share surpassed the Zacks Consensus Estimate of $2.02.

In the past three months, shares of the company gained 9.4% compared with the industry’s growth of 7.2%.




Let us delve deeper.

Key Factors & Estimates for Q4

Innovation investments, growing business in emerging markets and favorable e-commerce trends have been benefiting Stanley Black & Decker over time. Also, cost-saving initiatives, new pricing actions, lower tax rate and acquired assets might have aided its performance in the quarter.

On the flip side, the company suffered from adverse impacts of commodity inflation, tariffs and foreign currency woes in the third quarter. These headwinds might have impacted fourth-quarter performance as well.

The Zack Consensus Estimate for the company’s fourth-quarter earnings per share is pegged at $2.16, indicating 2.4% growth from the year-ago reported figure and a 1.4% increase sequentially. Also, the consensus estimate for revenues of $3,777 million suggests 3.9% growth from the year-ago quarter’s reported number and a 4% increase from the last reported quarter.

For the company’s Tools & Storage segment, the rising popularity of products — including DeWalt FlexVolt, Craftsman and others — aided third-quarter results. This might have aided its performance in the fourth quarter as well. The Zacks Consensus Estimate for the segment’s fourth-quarter sales is pegged at $2,667 million, indicating 3.3% increase from the year-ago quarter’s reported figure and 5.2% from the previous quarter’s number.

Moreover, transformational activities and efforts to expand electronic security solutions are expected to have favorably influenced the Security segment’s performance in the fourth quarter. Stanley Black & Decker anticipates growth in the segment’s fourth-quarter organic sales and margins.

The Zacks Consensus Estimate for the segment’s fourth-quarter sales is pegged at $504 million, suggesting no change from the year-ago reported figure and increase of 8.2% sequentially.

Persistent weakness in the automotive and general industrial markets as well as external headwinds might have adversely impacted the performance of the Industrial segment. The Zacks Consensus Estimate for the segment’s fourth-quarter sales is pegged at $618 million, indicating a 2.4% decline from the previous quarter’s reported figure. On a year-over-year basis, the segment’s revenues are anticipated to increase 12.6%.

Earnings Whispers

Our proven model predicts an earnings beat for Stanley Black & Decker 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Stanley Black & Decker has an Earnings ESP of +1.21%, with the Most Accurate Estimate of $2.19 above the Zacks Consensus Estimate of $2.16.

Stanley Black & Decker, Inc. Price, Consensus and EPS Surprise

 

Stanley Black & Decker, Inc. Price, Consensus and EPS Surprise

Stanley Black & Decker, Inc. price-consensus-eps-surprise-chart | Stanley Black & Decker, Inc. Quote

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies in the Zacks Industrial Products sector that you may want to consider as according to our model these too have the right combination of elements to post an earnings beat this quarter.

Valmont Industries, Inc. VMI presently has an Earnings ESP of +2.93% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tennant Company TNC currently has an Earnings ESP of +4.20% and a Zacks Rank #2.

Plug Power, Inc. PLUG presently has an Earnings ESP of +8.33% and a Zacks Rank #3.

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