What to Expect from Mettler-Toledo (MTD) in Q3 Earnings?

Mettler-Toledo International Inc. MTD will report third-quarter 2017 earnings on Nov 2 after the bell.

The company has a Zacks Rank #2 (Buy) and an Earnings ESP of -0.79%, a combination that makes surprise prediction difficult. This is because, per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 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.

Sell-rated stocks (Zacks Rank #4 or #5) are best avoided especially if they have some negative earnings ESP.

Mettler-Toledo’s earnings surprise history has been impressive as the company beat estimates in each of the last four quarters with an average positive surprise of 4.78%. We observe that Mettler-Toledo shares have rallied 61.3% year to date, outperforming its industry’s gain of 45.5%.

 

Q2 Highlights

Mettler-Toledo delivered strong second-quarter 2017 results, beating the Zacks Consensus Estimate on both counts.

Net revenues of $653.7 million were up 7.5% on a year-over-year basis. Adjusted earnings of $3.92 per share increased 21.7% from the year-ago quarter. The better-than-expected results were driven by strong growth across all product lines and regions.

Q3 Expectations

In the soon-to-be reported quarter, revenues are expected to be positively impacted by strength in Lab segment, service and product inspection businesses, and growth in China. The Zacks Consensus Estimate for this segment’s revenues is pegged at $76 million.

Mettler-Toledo International, Inc. Price and EPS Surprise

Mettler-Toledo International, Inc. Price and EPS Surprise | Mettler-Toledo International, Inc. Quote

We also expect margin expansion and EPS growth to be driven by the company’s ongoing operational excellence programs such as Blue Ocean, Stern Drive and Spinnaker. The Zacks Consensus Estimate for EPS stands at $4.33.

Notably, the company expects local currency sales growth of approximately 5% in the to-be-reported quarter. Adjusted earnings are expected to be in the range of $4.25-$4.30, an increase of 9%-11%.

However, year-over-year comparisons are expected to be unfavorable, given volatility in emerging market growth, foreign exchange risk and business concentration in China.

Stocks to Consider

Here are some stocks that you may want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:

Activision Blizzard, Inc. ATVI, with an Earnings ESP of +4.32% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

HubSpot, Inc. HUBS, with an Earnings ESP of +26.53% and a Zacks Rank #2.

Extreme Networks, Inc., EXTR with an Earnings ESP of +9.75% and a Zacks Rank #3.

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