Proto Labs, Inc. PRLB is scheduled to report first-quarter 2015 results on Apr 23, before the market opens. The Zacks Consensus Estimate for the quarter is pegged at 42 cents per share.
Proto Labs performed well in three out of four trailing quarters, with a positive average earnings surprise of 4.32%. In the last reported quarter, the company’s earnings of 39 cents per share surpassed the Zacks Consensus Estimate of 37 cents by 5.41%. Let us see how things are shaping up for Proto Labs this quarter.
Factors to Influence Q1 Results
In first-quarter 2015, economic activities across the globe have been jittery, with uncertainties prevailing in certain advance countries as well as major emerging nations. While China struggled to revive its financial markets, oil-exporting nations were severely hit by lower oil prices. In the U.S., industrial production in the quarter declined 1% over the year-ago tally due primarily to weakness in the mining and utilities industries.
Such negatives are likely to influence demand for Proto Labs’ custom parts used for prototyping and in short-run production. In addition, the company’s huge international exposure gives rise to severe headwinds in the form of foreign currency translations. Also, stiff competition from other prototype makers, both domestic and international, poses serious threat to the company’s growth.
However, an efficient management and marketing team, along with a unique ability to develop custom-made products, is expected to prove beneficial for Proto Labs. Moreover, benefits from the acquired assets of Fineline will enhance the company’s revenue-generation capabilities.
Earnings Whispers
Our proven model does not conclusively show that Proto Labs is likely to beat 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 this to happen. That is not the case here as you will see below.
Zacks ESP: Expected Surprise Prediction or ESP of Proto Labs is currently 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 42 cents per share.
Zacks Rank: Proto Labs currently carries a Zacks Rank #3 (Hold). This rank, when combined with a 0.00% ESP, makes surprise predictions difficult.
We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.
Stocks to Consider
Here are some companies in the sector that you may want to consider instead as our model shows they have the right combination of elements to post an earnings beat this quarter:
Deere & Company DE, with an Earnings ESP of +3.80% and a Zacks Rank #3.
Xylem Inc. XYL, with an Earnings ESP of +3.23% and a Zacks Rank #3.
Zebra Technologies Corporation ZBRA, with an Earnings ESP of +7.41% and a Zacks Rank #3.
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