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Carlisle (CSL) to Report Q2 Earnings: What's in the Offing?

Zacks Equity Research

Carlisle Companies Incorporated CSL is scheduled to report second-quarter 2019 results on Jul 23, after market close.

The company delivered average positive earnings surprise of 19.07% in the trailing four quarters, beating estimates thrice. Notably, Carlisle’s first-quarter adjusted earnings of $1.41 per share surpassed the Zacks Consensus Estimate of $1.11 by 27.03%.

In the past three months, shares of the company have rallied 3.6% against the industry’s 1.9% decline.

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

Factors to Influence Q2 Results

Carlisle is likely to continue benefiting from the strong momentum in the Carlisle Construction Materials segment, owing to solid backlog and high volume of reroofing projects in the North American non-residential construction markets. Also, strength in Carlisle Interconnect Technologies segment’s core markets, including aerospace, medical and test & measurement is likely to be conducive to its top line in the second quarter. In addition, solid traction in defense and SatCom markets will stoke growth.

Also, continued operational improvement, including cost savings from the Carlisle Operating System and overall positive market conditions particularly in Europe and Canada, will be advantageous. Notably, the company’s recent business acquisitions like Petersen Aluminum Corporation (January 2019) have strengthened its product portfolio and expanded market presence. These benefits are likely to get reflected in Carlisle’s upcoming quarterly results.

Notably, the Zacks Consensus Estimate for Carlisle Construction Materials segment’s second-quarter revenues is currently pegged at $897 million, indicating growth of 8.2% from the year-ago reported figure. Moreover, revenues for Carlisle Interconnect Technologies segment are anticipated to be strong, with estimates pegged at $252 million,
higher than $238 million reported a year ago.

However, escalating cost of sales and expenses are a major concern for Carlisle. For instance, challenging raw material, freight cost environment and labor-related costs had an adverse impact of 25 cents on the company’s earnings in first-quarter 2019. Notably, its total cost of goods sold increased 6.5% from the prior-year quarter. As a matter of fact, increase in costs might dent profits and lead to margin contraction.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The case with Carlisle is given below:

Earnings ESP: Carlisle has an Earnings ESP of -3.26% as the Most Accurate Estimate is pegged at $2.28, lower than the Zacks Consensus Estimate of $2.36.

Carlisle Companies Incorporated Price and EPS Surprise

Carlisle Companies Incorporated Price and EPS Surprise
Carlisle Companies Incorporated Price and EPS Surprise

Carlisle Companies Incorporated price-eps-surprise | Carlisle Companies Incorporated Quote

Zacks Rank: Carlisle carries a Zacks Rank #3, which increases the predictive power of ESP. However, its negative ESP makes surprise prediction difficult.

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.

Key Picks

Here are some companies from the same space you may want to consider as our model shows that these have the right mix of elements to beat estimates this earnings season:

CIRCOR International, Inc. CIR has an Earnings ESP of +1.10% and a Zacks Rank of 1.
You can see the complete list of today’s Zacks #1 Rank stocks here.

Axon Enterprise, Inc. AAXN has an Earnings ESP of +10.96% and a Zacks Rank of 3.

ACCO Brands Corporation ACCO has an Earnings ESP of +
0.63% and a Zacks Rank #3.

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