Myers Industries Inc. MYE is expected to report first-quarter 2015 results on Apr 23. In the last quarter, the company had delivered a positive earnings surprise of 18.2%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Though Myers beat estimates last quarter, the company has underperformed the Zacks Consensus Estimate by an average of 7.5% over the past four quarters. Decreased demand for agricultural and food processing products in the Material Handling segment, soft agricultural commodity prices, and a decline in Brazilian automotive production continue to hurt Myers’ performance, making us somewhat cautious of its upcoming results.
However, on the flip side, Myers is trying hard to streamline its business portfolio through acquisitions and the divestment of underperforming assets. Also, the company is expected to capitalize on the strategic initiatives undertaken last year, including structural changes, cross-selling opportunities, new products assortment and cost-reduction efforts across both the Material Handling and Distribution segments. Management expects these steps to enable the company to improve its sales and earnings performance in 2015.
Earnings Whispers
Our proven model does not conclusively show that Myers is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Myers is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 9 cents.
Zacks Rank: Myers carries a Zacks Rank #3 (Hold). Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
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:
BJ's Restaurants, Inc. BJRI has an Earnings ESP of +3.57% and a Zacks Rank #2 (Buy).
American Eagle Outfitters, Inc. AEO has an Earnings ESP of +18.18% and a Zacks Rank #2.
Best Buy Co., Inc. BBY has an Earnings ESP of +3.45% and a Zacks Rank #3.
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