Toro Co. (TTC) is set to report fourth-quarter fiscal 2014 results on Dec 4, before the opening bell. Last quarter, the company had posted a positive earnings surprise of 1.16%. Let’s see how things are shaping up for this announcement.
Factors at Play
In third-quarter fiscal 2014, Toro had reported record earnings of 87 cents per share, a 28% year-over-year improvement and well above management’s guidance of 80 cents per share. Sales grew 11% year over year to hit a record of $567.5 million driven by strong retail demand for both professional and residential products.
The company will continue to benefit from improvement in the housing and construction sector. Development of innovative products will also drive growth. Moreover, the ongoing construction activity will open up opportunities for residential and commercial irrigation and lighting businesses. Toro anticipates its international businesses to benefit from strong snow thrower demand in Canada and continued golf projects.
Moreover, there will be consistent growth in construction of golf courses around the world, which bodes well for Toro. The company successfully closed a number of equipment packages and distributors open order banks remain strong. However, foreign exchange volatility along with social and political unrest, remain headwinds.
Earnings Whispers?
Our proven model does not conclusively show that Toro is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Toro is 0.00% since the Most Accurate estimate is 16 cents, in line with the Zacks Consensus Estimate
Zacks Rank #3 (Hold): Toro has a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat.
Century Aluminum Co. (CENX) has an Earnings ESP of +8.20% and holds a Zacks Rank #2 (Buy).
Lincoln Electric Holdings Inc. (LECO) has an Earnings ESP of +1.10% and holds a Zacks Rank #3.
Precision Castparts Corp. (PCP) has an Earnings ESP of +0.88% and holds a Zacks Rank #3.
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