ESCO Technologies Earnings Preview

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ESCO Technologies (NYS: ESE) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings Tuesday. ESCO Technologies is a producer of engineered products and systems sold to customers worldwide. It operates in three operating segments: utility solutions, test, and filtration/fluid flow.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back ESCO Technologies as a buy. But with 54.5% of analysts rating it a buy, ESCO Technologies is still below the mean analyst rating of its nearest 10 competitors, which average 63% buys. Analysts don't like ESCO Technologies as much as competitor Elster Group overall. Eleven out of 12 analysts rate Elster Group a buy compared with six of 11 for ESCO Technologies.
  • Revenue Forecasts: On average, analysts predict $152.8 million in revenue this quarter. That would represent a decline of 4.4% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.29 per share. Estimates range from $0.23 to $0.43.

What our community says:
CAPS All-Stars are in strong support of the stock, with 89.3% granting it an "outperform" rating. The greater community backs the All-Stars, as 88.6% give it a rating of "outperform." Fools are keen on ESCO Technologies, though the message boards have been quiet lately with only 23 posts in the past 30 days. Despite the majority sentiment in favor of ESCO Technologies, the stock has a middling CAPS rating of three out of five stars.

Management:
ESCO Technologies' profit has risen year-over-year by an average of more than sevenfold over the past five quarters. A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases. The company's gross margin shrank by 5.4 percentage points in the last quarter. Revenue fell 8.3% while cost of sales rose 0.1% to $123.2 million from a year earlier.

Now let's get some insight into how efficient management is at running the business. Margins illustrate how efficiently a company captures portions of sales dollars. The company's net margins, which reflect what percentage of revenue becomes profit, have slipped downward year-over-year in the last two quarters. Here is how ESCO Technologies has been doing for the last four quarters:

Quarter

Q4

Q3

Q2

Q1

Gross Margin

35.4%

40.2%

40.9%

39%

Operating Margin

9.5%

11.8%

13%

10%

Net Margin

8.1%

7.4%

7.9%

6.8%

For all our ESCO Technologies-specific analysis, including earnings and beyond, add ESCO Technologies to My Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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