Milwaukee, WI-based Joy Global, Inc. JOY is scheduled to report second-quarter fiscal 2015 results before the opening bell on Jun 4, 2015.
Last quarter, Joy Global posted a negative earnings surprise of 34.21%. Let’s see how things are taking a turn for this announcement.
Factors Impacting this Quarter
In the second quarter, Joy Global advanced on its local China strategy by shipping its first fully domestically built long wall system.
To combat regressing market dynamics, the company is optimizing efficiency, improving its cost structure and reducing staffing levels to bring about monetary savings.
However, following the first quarter, which saw weak performance on account of tough market conditions, the second quarter too is expected to suffer due to extended production shutdown at many of its major customers. The highly competitive mining space and softness in demand are forcing miners to take a cautious step on new projects.
Earnings Whispers?
Our proven model does not conclusively show that Joy Global 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) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are at 55 cents per share.
Zacks Rank: Joy Global currently has a Zacks Rank #4 (Sell). The company’s 0.00% ESP when combined with a Rank #4 makes an earnings beat unlikely.
As it is, 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 to Consider
Here are some stocks in the broader industrial goods space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the second quarter earnings season:
Hudson Technologies Inc. HDSN has an earnings ESP of +12.50% and a Zacks Rank #1.
Ingersoll-Rand Plc IR has an earnings ESP of +4.88% and a Zacks Rank #3.
W.W. Grainger, Inc. GWW has an earnings ESP of +0.32% and a Zacks Rank #3.
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