What To Expect From Gates Industrial Corporation's (GTES) Q2 Earnings

Power transmission and fluid power solutions provider Gates Corporation (NYSE:GTES) will be announcing earnings results this Wednesday before the bell. Here’s what to look for.

Gates Industrial Corporation beat analysts’ revenue expectations by 2.9% last quarter, reporting revenues of $847.6 million, down 1.7% year on year. It was an exceptional quarter for the company, with an impressive beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ organic revenue estimates.

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

This quarter, analysts are expecting Gates Industrial Corporation’s revenue to decline 1.1% year on year to $875.3 million, improving from the 5.4% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.38 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Gates Industrial Corporation has missed Wall Street’s revenue estimates three times over the last two years.

Looking at Gates Industrial Corporation’s peers in the industrial machinery segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Worthington posted flat year-on-year revenue, beating analysts’ expectations by 5.6%, and GE Aerospace reported revenues up 21.2%, topping estimates by 15.6%. Worthington traded up 1.8% following the results while GE Aerospace was down 1.1%.

Read our full analysis of Worthington’s results here and GE Aerospace’s results here.

There has been positive sentiment among investors in the industrial machinery segment, with share prices up 6.5% on average over the last month. Gates Industrial Corporation is up 9.7% during the same time and is heading into earnings with an average analyst price target of $26.55 (compared to the current share price of $25.26).

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