Industrial Stocks Reporting Q4 Earnings This Week: CAT, GWW & More

The Industrial Products sector kicks off its fourth-quarter earnings season this week. Per the Earnings Trends report dated Jan. 22, the S&P 500 companies in the Industrial Products Sector are anticipated to witness a 6.7% year-over-year decline in fourth-quarter 2024 earnings on the back of 2.5% lower revenues. The sector is among seven of the 16 Zacks Sectors that are likely to report year-over-year declines in earnings for the quarter. Find the latest earnings estimates and surprises on Zacks Earnings Calendar.Some major industrial stocks like Caterpillar Inc. (CAT), W.W. Grainger, Inc. GWW, Dover Corporation DOV, Avery Dennison Corporation AVY and A. O. Smith AOS are set to report earnings this week. These announcements will offer valuable insight into how things have shaped up for industrial companies this earnings season. Caterpillar's performance, in particular, is closely watched by investors, as it serves as a key economic indicator for the sector.Factors at Play During Q4 for Industrial Products StocksThe Industrial Products sector’s overall fourth-quarter results are likely to reflect the contraction in the U.S. manufacturing sector, as highlighted by the Institute for Supply Management's manufacturing index. Despite gradual improvement throughout the quarter, with readings of 46.5% in October, 48.4% in November and 49.3% in December, the index averaged 48.1% for the quarter. A reading below 50% indicates contraction. Demand has been subdued as companies have been refraining from making capital investments.The Production index was in the contraction territory in October and November, with readings of 46.2% and 46.8%, respectively, but expanded slightly to 50.3% in December. This marked the first reading above 50% since May 2024. While the New Orders index initially contracted in October with a 47.1% reading, it showed improvement toward the end of the quarter with readings of 50.4% in November and 52.5% in December. The index averaged 50% in the quarter.Some industries, such as Electrical Equipment, Appliances and Components, Paper products; Food, beverage and tobacco products; Miscellaneous manufacturing, primary metals; and Computer and Electronic Products, saw growth in new orders toward the end of the quarter. Meanwhile, Textile Mills; Printing and Related Support Activities; Nonmetallic Mineral Products; Wood Products; Transportation Equipment; Fabricated Metal Products; Plastics and Rubber Products; and Machinery experienced declines.The sector continues to face headwinds from cost inflation, particularly for fuel, natural gas, aluminum and raw materials. Although cost-control measures and productivity improvements have been implemented to mitigate their impacts on margins, weak demand is expected to weigh on the sector’s bottom-line performance in the quarter.Key Predictions for CAT, GWW, DOV, AVY & AOSCaterpillar is set to report fourth-quarter 2024 results on Jan. 30, before the opening bell. CAT’s earnings outpaced the Zacks Consensus Estimates in three of the trailing four quarters while missing once, the average surprise being 6.14%.Caterpillar Inc. Price and EPS Surprise  Caterpillar Inc. price-eps-surprise | Caterpillar Inc. QuoteOur proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Our proven model does not conclusively predict an earnings beat for Caterpillar this time around. CAT has an Earnings ESP of -6.29% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.Estimates for CAT’s Q4 Revenues & Earnings: The Zacks Consensus Estimate for CAT’s fourth-quarter 2024 revenues is pegged at $16.64 billion, suggesting a 2.5% year-over-year decline. The consensus mark for earnings of $4.97 implies a 5% dip from the year-ago actual.Factors Likely to Have Shaped CAT’s Q4 Performance: CAT’s substantial backlog of $28.7 billion at the beginning of the quarter, and higher aftermarket parts and service-related revenues are likely to have supported its fourth-quarter top line. This is expected to have been negated by lower dealer inventories in the quarter. The Construction Industries and Resource Industries segments’ volumes are anticipated to have been lower in the quarter, offset by higher volumes in the Energy and Transportation segment (reflecting the solid demand across Oil and Gas, Power Generation, and Transportation). The impacts of lower volumes on margins are expected to have been offset by favorable costs. (Read more: CAT Gears Up to Report Q4 Earnings: Buy, Sell or Hold the Stock?)Grainger will release fourth-quarter 2024 results on Jan. 31. GWW’s earnings outpaced the Zacks Consensus Estimates in three of the trailing four quarters while missing once, the average surprise being 1.24%.W.W. Grainger, Inc. Price and EPS Surprise  W.W. Grainger, Inc. price-eps-surprise | W.W. Grainger, Inc. QuoteOur model predicts an earnings beat for Grainger this time around. GWW has an Earnings ESP of +0.59% and a Zacks Rank #3 at present.Estimates for GWW’s Q4 Revenues & Earnings: The Zacks Consensus Estimate for GWW’s fourth-quarter 2024 revenues is pegged at $4.23 billion, suggesting 6% year-over-year growth. The consensus mark for earnings of $9.75 implies 17% growth from the year-ago actual.Factors Likely to Have Shaped GWW’s Q4 Performance: Grainger has been witnessing strong growth in core product sales for the past few quarters. Also, GWW has been focusing on improving the end-to-end customer experience by making investments in its e-commerce and digital capabilities, and executing improvement initiatives within its supply chain. These factors are likely to have contributed to its quarterly performance.  The company’s pricing actions and volume growth will offset the impacts of higher operating costs and incremental SG&A expenses on its earnings.  Dover is set to release fourth-quarter 2024 results on Jan. 30, before the opening bell. The company topped Zacks Consensus Earnings estimates in the trailing four quarters, the earnings surprise being 4%, on average.Dover Corporation Price and EPS Surprise  Dover Corporation price-eps-surprise | Dover Corporation QuoteOur proven model predicts that DOV will register an earnings beat this time around as it has an Earnings ESP of +0.10% and a Zacks Rank #3 at present.Estimates for DOV’s Q4 Revenues & Earnings: The Zacks Consensus Estimate for Dover’s fourth-quarter earnings is pegged at $2.08 per share, indicating a 15% year-over-year decline. The consensus mark for revenues is pinned at $1.98 billion, implying a 6.2% decline from the year-ago reported figure.Factors Likely to Have Shaped DOV’s Q4 Performance: We expect Dover’s top line to reflect the ongoing momentum in its order and backlog levels, as well as gains from the recent acquisitions. However, impacts of divestitures, headwinds in European heat pumps and can-making equipment businesses, and low demand in the aerospace and defense business are expected to have negated these gains. DOV’s margins are likely to reflect volume growth, improved price-cost spread and cost-control efforts. (Read more: Dover to Report Q4 Earnings: What's in the Cards for the Stock?)Avery Dennison is scheduled to release fourth-quarter 2024 results on Jan. 30. Over the trailing four quarters, the company beat earnings estimates in the trailing four quarters, delivering a four-quarter average earnings surprise of 3.7%.Avery Dennison Corporation Price and EPS Surprise  Avery Dennison Corporation price-eps-surprise | Avery Dennison Corporation QuoteOur proven model does not conclusively predict an earnings beat for Avery Dennison this time around, as the company has an Earnings ESP of -1.35% and a Zacks Rank #4 (Sell) at present.Estimates for AVY’s Q4 Revenues & Earnings: The Zacks Consensus Estimate for AVY’s earnings for the to-be-reported quarter is pegged at $2.37 per share, indicating a 9.7% year-over-year increase. The same for revenues is pegged at $2.20 billion, suggesting 4.2% year-over-year growth.Factors Likely to Have Shaped AVY’s Q4 Performance: Avery Dennison’s results are likely to reflect improved volumes in both of its segments. The rise is likely to have been aided by higher volumes of Label Materials and growth in apparel. While inflated input costs are anticipated to have impacted the company’s margins in the to-be-reported quarter, its pricing and cost-saving actions are expected to have negated these headwinds on its margins. (Read more: Avery Dennison Gears up to Report Q4 Earnings: Here's What to Expect)A. O. Smith is slated to release fourth-quarter 2024 results on Jan. 30. The company beat the Zacks Consensus Estimate in three of the trailing four quarters while missing once. AOS has a trailing four-quarter earnings surprise of 0.28%, on average.A. O. Smith Corporation Price and EPS Surprise  A. O. Smith Corporation price-eps-surprise | A. O. Smith Corporation QuoteOur model predicts an earnings beat for AOS this time around. The company has an Earnings ESP of +0.93% and a Zacks Rank #3 at present.Estimates for AOS’s Q4 Revenues & Earnings: The Zacks Consensus Estimate for revenues is pegged at $952 million for the quarter, which indicates a decline of 3% from the year-ago quarter's actual. The consensus mark for A.O Smith’s earnings is pinned at 89 cents per share, suggesting an 8% year-over-year decline.Factors Likely to Have Shaped AOS’s Q4 Performance: Recent acquisitions made by A. O. Smith are likely to have driven its top line in the fourth quarter. Strong demand for commercial boilers and water treatment products is expected to offset weakness in the residential and commercial water heater industry, and reflect on the North America segment’s results. Weak consumer demand for its residential water treatment and water heating products in China is likely to have impacted the performance of the Rest of the World segment. Elevated costs are also expected to have hurt AOS’s earnings in the quarter. (Read more: A. O. Smith Gears Up to Report Q4 Earnings: Is a Beat in Store?)5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dover Corporation (DOV): Free Stock Analysis Report Avery Dennison Corporation (AVY): Free Stock Analysis Report A. O. Smith Corporation (AOS): Free Stock Analysis Report W.W. Grainger, Inc. (GWW): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks