What's in the Cards for IDEX (IEX) This Earnings Season?
IDEX Corporation IEX is scheduled to release second-quarter 2023 results on Jul 26, after the market close.
The Zacks Consensus Estimate for the company’s second-quarter earnings has been revised upward by a penny in the past 60 days. The company has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average beat being 4.3%.
Let's see how things are shaping up for IDEX this earnings season.
Factors to Note
Softness across pharma, biopharma and nutrition end markets, due to tighter capital availability and customer hesitancy arising from recession concerns within the material processing technology business, is likely to have weighed on IDEX’s second-quarter performance. Also, decreasing volume in the North American OEM market due to supply-related issues are expected to have dented the company’s top line.
Unfavorable price/cost impacts and higher discretionary expenses are likely to have weighed on IEX’s second-quarter performance. Also, increasing cost of sales and rising selling, general and administrative expenses are expected to have dented IEX’s margins. For the second quarter, we expect the company’s gross margin to decrease by 80 basis points from the year ago reported figure.
Given the company’s substantial international presence, foreign-currency headwinds are likely to have weighed on its top line in the second quarter.
However, strength in industrial, water, energy and chemical end markets within the Fluid & Metering Technologies segment is expected to have supported the company’s performance in the to-be-reported quarter. For the second quarter, we expect the Fluid & Metering Technologies segment’s revenues to increase 5.6% year over year.
The acquisition of Muon Group (November 2022), which expanded IEX’s growing platform of precision technology business within the Health & Science Technologies segment, is likely to have aided the company’s performance in the second quarter. We expect second-quarter revenues to climb 7.1% from the year-ago period. For the quarter, we expect adjusted earnings to increase 4.6% year over year.
IDEX Corporation Price and EPS Surprise
IDEX Corporation price-eps-surprise | IDEX Corporation Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for IDEX 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, which is not the case here, as elaborated below.
Earnings ESP: IEX has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.12. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: IEX presently carries a Zacks Rank of 3.
Highlights of Q1 Earnings
IDEX reported impressive first-quarter 2023 results. The company’s earnings surpassed the Zacks Consensus Estimate by 3%, whereas sales beat the same by 3.4%. In the reported quarter, IDEX’s adjusted earnings were $2.09 per share, beating the Zacks Consensus Estimate of adjusted earnings of $2.03 per share. On a year-over-year basis, the bottom line increased 6.6% from the year-ago quarter’s figure of $1.96 per share. In the quarter under review, IDEX’s net sales were $845.4 million, reflecting year-over-year growth of 12.6%.
Stocks to Consider
Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Allegion plc ALLE has an Earnings ESP of +3.94% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to release second-quarter results on Jul 26. ALLE’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 12.5%.
Ingersoll Rand Inc. IR has an Earnings ESP of +0.85% and a Zacks Rank of 3. The company is slated to release second-quarter 2023 results on Aug 2.
Ingersoll Rand’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 12.6%.
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