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Things You Must Know Ahead of Snap-on's (SNA) Q4 Earnings

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Snap-on Inc. SNA is scheduled to report fourth-quarter 2020 results on Feb 4. This global provider of professional tools, equipment and related solutions is likely to have witnessed revenue and earnings declines in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s fourth-quarter earnings is pegged at $2.95 per share, which suggests a decline of 4.2% from the year-ago quarter’s reported figure. However, the consensus mark has moved up by a penny in the past 30 days.

For fourth-quarter revenues, the consensus mark is pegged at $949.2 million, which indicates a 0.6% decrease from the prior-year quarters’ reported figure.

In the last reported quarter, the company delivered an earnings surprise of 51.9%. The company delivered an earnings surprise of 11.3%, on average, in the trailing four quarters.

SnapOn Incorporated Price and EPS Surprise

SnapOn Incorporated Price and EPS Surprise
SnapOn Incorporated Price and EPS Surprise

SnapOn Incorporated price-eps-surprise | SnapOn Incorporated Quote

Key Factors to Note

Snap-on has been reeling under the tough economic environment stemming from the uncertain COVID-led situation. Owing to this, it has been witnessing a declining trend in the Repair Systems & Information Group segment for the past few quarters. Lower sales to OEM dealerships have been hurting the segment’s sales. In the last reported quarter’s earnings call, the company expected this trend to persist in the fourth quarter.

Management has been making efforts to get the segment back on track by leveraging its capabilities in the automotive repair space and expanding the base in automotive repair and across regions, particularly critical industries. These efforts might have partly cushioned the segment’s sales.

Further, the adverse impacts of foreign currency translations remain a drag. In fact, on its last earnings call, management expected currency woes to persist in the fourth quarter.

Despite the tough COVID-19 environment, Snap-on has been witnessing positive sales momentum. Also, gains from the Snap-on Value Creation model have been contributing to favorable quarterly performance. This is likely to have aided sales in the fourth quarter.

Moreover, the company has been making efforts, including cost-cutting initiatives and the Rapid Continuous Improvement (“RCI”) plan, to combat the uncertain impacts of COVID-19. Notably, its robust business model and focus on value-creation processes have been aiding its earnings. Moreover, the RCI program, designed to enhance organizational effectiveness and efficiency and generate savings, has been aiding margins. Such endeavors are likely to have aided the company’s fourth-quarter performance.

What the Zacks Model Unveils

Our proven model conclusively predicts an earnings beat for Snap-on 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.

Snap-on has a Zacks Rank #2 and an Earnings ESP of +1.21%.

Other Stocks Poised to Beat Earnings Estimates

Here are some more companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat.

Steven Madden, Ltd. SHOO currently has an Earnings ESP of +1.61% and it sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

YETI Holdings, Inc. YETI currently has an Earnings ESP of +6.91% and a Zacks Rank #2.

Vista Outdoor Inc. VSTO has an Earnings ESP of +5.39% and a Zacks Rank #2 at present.

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SnapOn Incorporated (SNA) : Free Stock Analysis Report

Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report

Vista Outdoor Inc. (VSTO) : Free Stock Analysis Report

YETI Holdings, Inc. (YETI) : Free Stock Analysis Report

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