DNOW Inc. DNOW is scheduled to release first-quarter 2024 results on May 10, before market open.
The company has an impressive earnings surprise history, having beat the Zacks Consensus Estimate in three of the preceding four quarters while missing the mark in one. The earnings surprise was 15.6%, on average.
Let’s see how things have shaped up for DNOW this earnings season.
Factors to Note
Stronger project activity and an increase in international rig count are expected to have supported DNOW’s international revenues in the first quarter. The Zacks Consensus Estimate for international revenues is pegged at $78 million, indicating a 5.4% increase from the year-ago reported number.
Revenues from the United States are expected to have been buoyed by an increase in project-related activity and incremental revenues from acquisitions.
The acquisition of EcoVapor (February 2023), which expanded product line offerings and services to the company’s U.S. Process Solutions business, is expected to aid the results.
However, lower project-related activity and an unfavorable foreign exchange rate impact are expected to have ailed revenues from Canada. The Zacks Consensus Estimate for revenues from Canada is pegged at $71 million, implying a 14.5% decrease from the year-ago reported number.
The escalating cost of products and operating expenses have been concerns for DNOW for some time now. The impacts of the high cost of inventory sold and related items, such as vendor consideration and inventory allowances, are likely to have affected DNOW’s margin and profitability.
Owing to its extensive regional presence, risks arising from unfavorable movements in foreign currencies and geopolitical issues are likely to have hurt the company’s performance.
The Zacks Consensus Estimate for the company’s revenues is pegged at $572 million, which suggests a decrease of 2.1% from the year-ago quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at 24 cents per share, which implies a decrease of 4% from the year-ago quarter’s reported figure.
DNOW Inc. Price and EPS Surprise 
DNOW Inc. price-eps-surprise | DNOW Inc. Quote
Earnings Whispers
Our proven model predicts a likely earnings beat for DNOW this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: DNOW has an Earnings ESP of +2.13% as the Most Accurate Estimate is pegged at 24 cents per share, higher than the Zacks Consensus Estimate of 23 cents per share. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: DNOW presently carries a Zacks Rank of 3.
Performance of Other Industrial Companies
IDEX Corporation’s IEX second-quarter 2024 adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1%.
IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million. The top line also decreased 5.3% year over year.
A. O. Smith Corporation’s AOS second-quarter adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.
Another Stock to Consider
Here is a company within the broader Industrial Products sector, which, according to our model, also has the right combination of elements to beat on earnings.
Greif, Inc. GEF has an Earnings ESP of +3.37% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is slated to release second-quarter fiscal 2024 (ended April 2024) results on Jun 5. GEF delivered a trailing four-quarter earnings surprise of 150.6%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
