Atkore (ATKR) to Report Q1 Earnings: What’s in the Cards?

Atkore International Group Inc. ATKR is scheduled to release first-quarter fiscal 2019 results, before the opening bell on Feb 6.

In the last reported quarter, the company delivered year-over-year improvement in both its top and bottom line. Atkore’s adjusted earnings per share also beat the Zacks Consensus Estimate by 9.7%. Notably, the company has an impressive surprise history, surpassing the Zacks Consensus Estimate the preceding four quarters, recording average positive surprise of 27.6%.

Let’s see how things are shaping up prior to this announcement.

Atkore International Group Inc. Price and EPS Surprise

For its Electrical Raceway segment (which contributed around 74% of the company’s revenues in fiscal 2018), Atkore expects volume to be flat in the to-be-reported quarter. For the Mechanical Products & Solutions segment (which contributed around 26% of the company’s revenues in fiscal 2018), the company expects volume to be up 2% for the quarter.

Continued improvement in non-residential and residential construction as well as industrial markers will boost Atkore’s top line. Its M&A initiatives are also likely to favorably impact results. The Zacks Consensus Estimate for total sales of $444.9 million indicates an increase of nearly 7% from the prior-year quarter.

The company expects adjusted EBITDA for the Electrical Raceway segment to lie between $67 million to $72 million. For the Mechanical Products & Solutions segment, adjusted EBITDA is projected between $8 million and $10 million.

The company’s pricing actions to offset commodity and freight cost inflation will sustain margins. It expects adjusted EBITDA to be in the range of $67-$72 million in first quarter of fiscal 2019. Adjusted earnings per share is expected to lie between 65 cents and 75 cents.

The Zacks Consensus Estimate for Atkore’s earnings per share is pegged at 72 cents for fiscal first-quarter 2019, reflecting year-over-year growth of 50%.

Our proven model does not conclusively show that Atkore is likely to beat estimates in the to-be-reported quarter. This is because a stock must have the right combination of the two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. But that is not the case here as you will see below.

Earnings ESP: Atkore has an Earnings ESP of -5.80% as the Most Accurate Estimate of 65 cents is lower than the Zacks Consensus Estimate of 69 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Atkore’s Zacks Rank of 3, which when combined with a negative Earnings ESP, makes surprise prediction inconclusive.

It should be noted that 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.

Shares of the company have lost 1% compared with the 17% decline recorded by the industry.

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:

Columbus McKinnon Corporation CMCO has an Earnings ESP of +6.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Manitowoc Company, Inc. MTW has an Earnings ESP of +44.44% and a Zacks Rank #3.

Terex Corporation TEX has an Earnings ESP of +3.17% and a Zacks Rank #3.

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