Stanley Black & Decker, Inc. SWK is scheduled to release fourth-quarter 2024 results on Feb. 5, before market open.

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The Zacks Consensus Estimate for this New Britain, CT-based tool maker’s fourth-quarter revenues is pegged at $3.6 billion, indicating a decline of 4.4% from the year-ago quarter. The consensus estimate for adjusted earnings is pinned at $1.28 per share. The figure indicates an increase of 39.1% from the year-ago quarter’s number.

The consensus estimate for earnings has increased 2.4% in the past 30 days. The company has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 18.6%.

Let’s see how things have shaped up for Stanley Black before the announcement.

Factors Likely to Have Shaped SWK’s Quarterly Performance

Stanley Black’s Industrial segment’s results are expected to benefit from the solid momentum in the Engineered Fastening business, driven by strength in the aerospace end market. However, persistent softness in the general industrial market is expected to have hurt the segment’s performance.

Also, the divestiture of SWK’s infrastructure business is likely to have weighed on the segment’s year-over-year top-line comparison. We expect the Industrial segment’s revenues to decline 15.2% year over year to $493.8 million.

The company has been witnessing a slowdown in the industrial sector. Lower demand for power tools, owing to the softness in the DIY and power tools market, is likely to have reflected in the Tools & Outdoor segment’s top-line performance. However, solid demand for the DEWALT product line is likely to have augmented its sales. The consensus estimate for the segment’s revenues is pegged at $3.07 billion, indicating a 2.8% decrease from the year-ago quarter’s number.

Nonetheless, SWK’s cost-reduction program is likely to have supported its bottom line. The company is expected to have put up a healthy margin performance, aided by supply-chain transformation and inventory reduction efforts. We anticipate SWK’s adjusted gross margin to be 32%, indicating an expansion of 220 basis points on a year-over-year basis.

Given the company’s extensive geographic presence, its operations are subject to foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt Stanley Black's overseas business.

Earnings Whispers

Our proven model predicts an earnings beat for Stanley Black 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: Stanley Black has an Earnings ESP of +3.82% as the Most Accurate Estimate is pegged at $1.32 per share, which is higher than the Zacks Consensus Estimate of $1.28. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: Stanley Black presently carries a Zacks Rank of 3.

Other Stocks to Consider

Here are some other companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Allegion plc ALLE has an Earnings ESP of +1.34% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to release fourth-quarter results on Feb. 18. Allegion’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.9%.

Flowserve Corporation FLS has an Earnings ESP of +2.60% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter results on Feb. 18.

Flowserve’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark in one, the average surprise being 10.8%.

Deere & Company DE has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present. The company is slated to release its first-quarter fiscal 2025 results on Feb. 20.

DE’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 13.5%.

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Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report

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