What's in the Offing for H&E Equipment's (HEES) Q2 Earnings?
H&E Equipment Services, Inc. HEES is scheduled to report second-quarter 2019 results on Jul 25, before the opening bell. H&E Equipment has an impressive earnings surprise history having surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 31.47%.
Which Way Are Q2 Estimates Headed?
The Zacks Consensus Estimate for second-quarter revenues is pegged at $328.7 million, indicating an improvement of 5.91% from the year-ago quarter. The same for earnings stands at 58 cents, at same level as the prior-year reported figure. Notably, the consensus mark has remained unchanged over the past 30 days.
H&E Equipment Services, Inc. Price and EPS Surprise
H&E Equipment Services, Inc. price-eps-surprise | H&E Equipment Services, Inc. Quote
Shares of the company have plunged 31.4% in a year, compared with the industry’s decline of 3.1%.
Will the upcoming earnings release provide a boost to H&E Equipment Services’ stock? Let’s take a look.
Factors at Play
The company’s top-line will benefit from solid end user market demand. Demand for equipment in non-residential and other end user construction markets remains solid. Notably, the American Institute Architects is projecting non-residential construction to improve 4.4% throughout 2019. Activity in energy-related markets remained at steady levels in the June-ended quarter. Increased spending for transportation and infrastructure-related projects also bode well. Results in the quarter will also reflect the impact of acquisitions of Contractors Equipment Center, Rental Inc. and We-Rent-It.
Gross margin performance in the quarter will benefit from performance improvements within the various revenue segments. However, SG&A expenses will be likely be elevated in the to-be-reported quarter owing to higher employee salaries, wages, payroll taxes and related employee benefit and other employee-related expenses on account of acquisitions, a larger workforce and higher incentive compensation related to improved profitability. This will weigh on operating margins in the June ending quarter.
Earnings Whispers
Our proven model does not show that H&E Equipment Services is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: H&E Equipment Services’ Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%.
Zacks Rank: H&E Equipment Services currently has a Zacks Rank #4 (Sell). Notably, we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few Industrial Products stocks which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
John Bean Technologies Corporation JBT has an Earnings ESP of +1.71% and a Zacks Rank of 1. The stock has appreciated 29.5% over the past year. You can seethe complete list of today’s Zacks #1 Rank stocks here.
AptarGroup, Inc. ATR has a Zacks Rank #2 and an Earnings ESP of +0.56%. The stock has gained 29.7% over the past year.
Napco Security Technologies, Inc. NSSC, a Zacks Rank #2 stock, has an Earnings ESP of +4.00%. The stock has surged 54.3% in a year’s time.
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