Welding and cutting equipment manufacturer ESAB (NYSE:ESAB) will be announcing earnings results tomorrow before market hours. Here’s what to look for.

ESAB beat analysts’ revenue expectations by 3.2% last quarter, reporting revenues of $673.3 million, down 1.1% year on year. It was an exceptional quarter for the company, with an impressive beat of analysts’ EBITDA estimates.

Is ESAB a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting ESAB’s revenue to decline 1.9% year on year to $676.2 million, a reversal from the 3.8% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.16 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. ESAB has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 4.4% on average.

Looking at ESAB’s peers in the professional tools and equipment segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Lincoln Electric’s revenues decreased 3.4% year on year, beating analysts’ expectations by 2.5%, and Stanley Black & Decker reported flat revenue, topping estimates by 3.8%. Lincoln Electric traded up 10% following the results while Stanley Black & Decker’s stock price was unchanged.

Read our full analysis of Lincoln Electric’s results here and Stanley Black & Decker’s results here.

Stocks, especially growth stocks where cash flows further in the future are more important to the story, have had a good 2024. An economic soft landing (so far), the start of the Fed's rate cutting campaign, and the election of Donald Trump were positives for the market, and while some of the professional tools and equipment stocks have shown solid performance, the group has generally underperformed, with share prices down 4.4% on average over the last month. ESAB is up 2.8% during the same time and is heading into earnings with an average analyst price target of $133.90 (compared to the current share price of $132.40).

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