Griffon (GFF) to Report Q1 Earnings: Is a Beat in Store?

Griffon Corporation GFF is expected to release first-quarter fiscal 2024 (ended Dec 31, 2023) results on Jan 30.

The company’s earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 28.6%. In the last reported quarter, its earnings of $1.19 per share surpassed the Zacks Consensus Estimate of 97 cents by 22.7%.

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In the past three months, GFF’s shares have risen 50.8% compared with the industry’s growth of 11.5%.

Let’s see how things might have shaped up prior to the announcement.

Key Factors and Estimates for Q1

Griffon’s fiscal first-quarter performance is likely to have benefited from strength in the Home and Building Products (HBP) segment. The segment is expected to reflect higher revenues on the back of increased commercial and residential volumes and effective pricing.

The company has been trying to improve its performance through operational initiatives. Its increased investment in marketing, along with strong residential and commercial channels, is likely to have boosted its performance in the to-be-reported quarter.

However, the Consumer and Professional Products (CPP) segment is anticipated to have put up a weak show in the quarter due to soft consumer demand, elevated customer inventory levels and customer-supplier diversification in the United States.

Given the company’s substantial international operations, foreign-currency woes might have hurt its top line in the fiscal first quarter. Also, increased labor, advertising and marketing costs are likely to have dented its bottom line. Reduced raw material costs are likely to have offered some respite.

The consensus estimate for Griffon’s fiscal first-quarter total revenues is currently pegged at $597 million, indicating a decrease of 8% from the year-ago quarter’s reported number. The consensus estimate for earnings of 78 cents indicates a decline of 9.3% on a year-over-year basis.

Griffon Corporation Price and EPS Surprise

Griffon Corporation price-eps-surprise | Griffon Corporation Quote

Zacks Model

Our proven model predicts an earnings beat for Griffon 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. That is the case here.

Griffon has an Earnings ESP of +2.08%, as the Most Accurate Estimate is pegged at 79 cents, higher than the Zacks Consensus Estimate of 78 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company sports a Zacks Rank #1 at present.

Other Stocks With the Favorable Combination

Here are three other companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming release.

Danaher Corporation DHR has an Earnings ESP of +3.46% and a Zacks Rank #3 at present. The company is slated to release fourth-quarter results on Jan 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Danaher delivered a trailing four-quarter earnings surprise of 8.5%, on average. The stock has rallied 25.9% in the past three months.

Xylem Inc. XYL has an Earnings ESP of +1.40% and a Zacks Rank #3 at present. The company is slated to release fourth-quarter results on Feb 6.

Xylem delivered a trailing four-quarter earnings surprise of 14.4%, on average. The stock has rallied 25.9% in the past three months.

Eaton Corporation ETN has an Earnings ESP of +0.20% and a Zacks Rank #2 at present. The company is slated to release fourth-quarter results on Feb 1.

Eaton delivered a trailing four-quarter earnings surprise of 4.2%, on average. The stock has rallied 24.3% in the past three months.

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

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