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What's in Store for American Outdoor's (AOBC) Q3 Earnings?

Zacks Equity Research

American Outdoor Brands AOBC is scheduled to release third-quarter fiscal 2019 results on Mar 7, after the opening bell.

In the last reported quarter, the company delivered a positive earnings surprise of 53.85%. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 64.88%.

Let’s take a detailed look at the factors influencing American Outdoor Brands’ upcoming results.

Factors to Consider

American Outdoor Brands is strongly focusing on innovations and expansion of addressable market to support its organic growth strategy. The company’s outdoor products and accessories division expects to launch more than 250 products in calendar year 2019, up from approximately 150 in 2018.

No doubt, a notable portion of these new products has been introduced in the company’s to-be-reported quarter, which in turn, should boost the top line. In line with such developments, the Zacks Consensus Estimate for revenues in the fiscal third quarter is pegged at $162.6 million, representing a 3.3% rise on a year-over-year basis.

On the contrary, the company is expected to witness lower margins in the fiscal third quarter on account of the December holiday shut down, increased expenses for the logistics facility and higher operating expenses due to trade shows.

Meanwhile, solid product innovations are expected to bolster the company’s bottom line. Notably, the Zacks Consensus Estimate for earnings in the fiscal third quarter  is pegged at 12 cents, which reflects year-over-year growth of 33.33%.

For third-quarter fiscal 2019, American Outdoor Brands anticipates adjusted earnings of 9-13 cents per share. Revenues are anticipated to be $155- $165 million.

American Outdoor Brands Corporation Price and EPS Surprise

American Outdoor Brands Corporation Price and EPS Surprise | American Outdoor Brands Corporation Quote

What the Zacks Model Unveils

Our proven model does not conclusively show that American Outdoor Brands is likely to beat estimates in the third 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.

Earnings ESP: American Outdoor Brands has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: American Outdoor Brands has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Recent Defense Releases

Textron TXT reported fourth-quarter 2018 adjusted earnings from continuing operations of $1.15 per share, which surpassed the Zacks Consensus Estimate of 98 cents by 17.3%. The bottom line also surged 55.4% from 74 cents in the year-ago quarter.

Hexcel Corporation HXL reported fourth-quarter 2018 adjusted earnings of 82 cents per share, exceeding the Zacks Consensus Estimate of 80 cents by 2.5%. Further, the bottom line improved 17.1% from the prior-year quarter’s 70 cents.

General Dynamics Corporation GD reported fourth-quarter and 2018 results. Fourth-quarter earnings from continuing operations of $3.07 per share beat the Zacks Consensus Estimate of $2.98 by 3%. Reported earnings were up 46.2% from $2.10 in the year-ago quarter.

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