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Will Increasing Expenses Dent IDEX's (IEX) Q1 Earnings?

IDEX Corporation IEX is scheduled to release first-quarter 2024 results on Apr 23, after market close.

The Zacks Consensus Estimate for the company’s first-quarter earnings has remained steady 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 beat being 5.2%.

The consensus estimate for the company’s first-quarter 2024 revenues is pegged at $802 million, suggesting a decline of 5.2% from the year-ago quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at $1.75 per share, indicating a 16.3% decline from the year-ago quarter’s reported number.

Let's see how things are shaping up for IDEX this earnings season.

Factors to Note

Softness in the life sciences, analytical instrumentation and semiconductor markets is expected to have hurt the Health & Science Technologies (HST) segment in the first quarter. We expect the HST segment’s revenues to decrease 8.5% year over year to $321.0 million in the first quarter.

The increasing cost of sales due to escalating raw material costs, and rising selling, general and administrative expenses, due to higher employee-related costs and discretionary spending, are likely to have dented IEX’s bottom line in the to-be-reported quarter. We anticipate the company’s adjusted earnings to decline 16.1% on a year-over-year basis to $1.75 per share in the to-be-reported quarter.

The company’s international presence exposes it to the risk of adverse currency fluctuations, which are likely to have hurt its performance in the to-be-reported quarter. Our estimate for the company’s revenues in the first quarter is pegged at $798.7 million, suggesting a 5.5% decrease from the year-ago reported figure.

However, strong momentum in the fire and safety and Band-It businesses is likely to have supported the Fire & Safety/Diversified Products in the first quarter. We expect the segment’s revenues to increase 1.5% to $176.9 million from the year-ago reported figure.

Strength in the industrial businesses is expected to have aided the Fluid & Metering Technologies segment’s results in the first quarter.

The STC Material Solutions acquisition, which expanded the company’s growing expertise in material sciences, is expected to have bolstered top-line results in the to-be-reported quarter.

IDEX Corporation Price and EPS Surprise

IDEX Corporation price-eps-surprise | IDEX Corporation Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for IEX 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 not the case here, as elaborated below.

Earnings ESP: IDEX has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.75. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: IDEX presently carries a Zacks Rank of 3.

Highlights of Q4 Earnings

IDEX’s fourth-quarter 2023 adjusted earnings of $1.83 per share surpassed the Zacks Consensus Estimate of $1.78. On a year-over-year basis, the bottom line decreased approximately 9% from the year-ago quarter’s figure of earnings of $2.01 per share. In the quarter under review, IDEX’s net sales of $788.9 million outperformed the Zacks Consensus Estimate of $769 million. However, the top line decreased 3% year over year.

Stocks to Consider

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

AptarGroup, Inc. ATR has an Earnings ESP of +0.59% 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 scheduled to release first-quarter 2024 results on Apr 25. AptarGroup’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 7.8%.

Crane Company CR has an Earnings ESP of +0.28% and a Zacks Rank of 3. The company is slated to release first-quarter 2024 results on Apr 22.

Crane Company’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 25.1%.

Allegion plc ALLE has an Earnings ESP of +5.69% and a Zacks Rank of 3. The company is slated to release first-quarter 2024 results on Apr 25.

Allegion’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 10.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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