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American Outdoor Brands (AOBC) Q4 Earnings: What's in Store?

Zacks Equity Research
Updated

American Outdoor Brands Corporation AOBC is scheduled to report fourth-quarter and fiscal 2018 results, after market close on Jun 20.

The gun maker surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 9.46%. Let’s see how things are shaping up for this quarter.

Factors to Consider

For the past few quarters, the company has been facing several challenges in the consumer market for firearms due to lower shipments. Such lower shipments can be attributed to weak demand as evident from the consequent declines in firearm background checks, per the National Instant Criminal Background Check System (NICS).

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Nevertheless, according to the FBI's NICS, firearm background checks improved 9.1% year over year for the period February-April 2018, thus reflecting an increase in demand. This, in turn, is likely to boost sales of the publicly traded gun manufacturers like American Outdoor Brands.

Meanwhile, the company has strengthened its focus on manufacturing of innovative products. During the fiscal fourth quarter, American Outdoor Brands launched a new personal protection concealed carry pistol — the M&P380 Shield EZ. We may expect to witness more such innovations made by the company in its upcoming results, which might push up its cost of production. However, revenue recognition from these products can not be expected in the fiscal fourth quarter.

While the Zacks Consensus Estimate for American Outdoor Brands’ fiscal fourth-quarter earnings of 11 cents projects a decline of 80.7%, the same for revenues of $182.9 million hints at a decrease of 20.2% on a year-over-year basis.

American Outdoor Brands Corporation Price and EPS Surprise

American Outdoor Brands Corporation Price and EPS Surprise | American Outdoor Brands Corporation Quote

Earnings Whisper

Our proven model does not conclusively show an earnings beat for American Outdoor Brands this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.

Zacks ESP: American Outdoor Brands has an Earnings ESP of -29.41% as the Most Accurate estimate of 8 cents lies below the Zacks Consensus Estimate of 11 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3, which increases the power of surprise prediction. However, a negative Earnings ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Meanwhile, 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.

Other Defense Releases

Spirit AeroSystems Holdings SPR reported first-quarter 2018 earnings of $1.10 per share, which missed the Zacks Consensus Estimate of $1.35 by 18.5%.

Rockwell Collins COL reported results for second-quarter fiscal 2018 (ended Mar 31, 2018). The company’s adjusted earnings per share of $1.81 surpassed the Zacks Consensus Estimate of $1.53 by 3.4%.

Raytheon Company RTN reported first-quarter 2018 earnings from continuing operations of $2.20 per share, beating the Zacks Consensus Estimate of $2.10 by 4.8%.

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Rockwell Collins, Inc. (COL) : Free Stock Analysis Report
 
Spirit Aerosystems Holdings, Inc. (SPR) : Free Stock Analysis Report
 
American Outdoor Brands Corporation (AOBC) : Free Stock Analysis Report
 
Raytheon Company (RTN) : Free Stock Analysis Report
 
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