RBC Bearings Inc. (ROLL) is scheduled to report third-quarter fiscal 2015 results before the opening bell on Feb 3, 2015. Over the last four trailing quarters, the company reported a negative average earnings surprise of 3.46%. However, in the preceding quarter, the company reported earnings of 70 cents, which surpassed the Zacks Consensus Estimate by 1.45%. Let’s see how things are shaping up prior to this announcement.
Factors to Influence this Quarter
With increasing industrialization, demand for metals is rising worldwide. Excess of demand over supply is putting upward pressure on the price of steel – a major raw material – which is adversely affecting the cost structure. This is likely to weigh on the company's margins in the to-bereported quarter.
In addition, the last quarter was the shortest in terms of total operational days. It was also not a very active season. The company had also lowered its outlook for third-quarter fiscal 2015.
Earnings Whispers
Considering the above factors, our proven model conclusively states that RBC Bearings is likely to miss earnings this quarter. That 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 an earnings beat. That is not the case here as we will see below.
Zacks ESP: RBC Bearings has an Earnings ESP of -3.28% for the fiscal third quarter, as the Most Accurate estimate of 59 cents stands below the Zacks Consensus Estimate of 61 cents.
Zacks Rank: RBC Bearings’ Zacks Rank #4 (Sell) decreases the predictive power of earnings ESP. This when combined with a negative ESP predicts an earnings miss. We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Noranda Aluminum Holding Corp. (NOR), with an Earnings ESP of +30.0% and a Zacks Rank #1.
Berry Plastics Group, Inc. (BERY), with an Earnings ESP of +3.85% and a Zacks Rank #2.
Century Aluminum Co. (CENX), with an Earnings ESP of +7.69% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment