Voxeljet AG VJET is slated to report fourth-quarter 2015 results on Mar 31, 2016, after the closing bell.
Last quarter, the company had posted a positive earnings surprise of 42.9%. For the trailing four quarters, the company has an average negative surprise of 4%, in spite of having beat estimates on two occasions.
Let us see how things are shaping up for this announcement.
Factors to Consider
In the financial guidance for the year ending Dec 31, 2016 released last month, Voxeljet pacified investors stating that it has reconfirmed the revenue guidance in the range of €23–€24 million for full-year 2015. The company had earlier provided this guidance during its third-quarter results when it forecasted that 2015 revenues are projected to grow 50% on a year-over-year basis.
Management believes that the usual growth drivers like global Systems sales; surging Services revenues at its German facility; robust contribution from its Services facility in Michigan, Voxeljet America and Services facility outside England, Voxeljet UK will bolster fourth-quarter performance. The company targets long-term revenue growth by expanding global footprint through subsidiaries.
Despite consistent stellar revenue performances, Voxeljet’s high operating expenses may severely cripple bottom-line growth during the fourth quarter of 2015. Especially, rise in its Long Term Cash Incentive Plan (LTCIP)-related expenses has proved to be a major drag on the earnings performance over the past couple of quarters and is likely to hurt the upcoming earnings results as well.
Moreover, higher selling and administrative expenses, coupled with impairment charges associated with a digital library at Voxeljet UK subsidiary, may pose concerns for the company’s fourth-quarter financials. In addition to this, currency exchange costs have proved to be a formidable headwind for the company and may continue to weigh upon the quarterly performance.
Earnings Whispers
Our proven model does not conclusively show that Voxeljet will beat earnings this season. This is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 10 cents. Hence, the difference is 0.00%.
Zacks Rank: Voxeljet carries Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s 0.00% Earnings ESP makes surprise prediction difficult. Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
AptarGroup, Inc. ATR, with an earnings ESP of +2.78% and Zacks Rank #2.
BP plc BP with an Earnings ESP of +76.00% and a Zacks Rank #3.
Bruker Corporation BRKR, with an earnings ESP of +7.14% and Zacks Rank #2.
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