REV Group (REVG Quick QuoteREVG ) is scheduled to report third-quarter fiscal 2021 (ended Jul 31, 2021) earnings on Sep 8, 2021, before market open.
The company has a stellar surprise record with its earnings having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being in excess of 100%.
REV Group, Inc. Price and EPS Surprise
REV Group, Inc. price-eps-surprise | REV Group, Inc. Quote
Moreover, the Zacks Consensus Estimate for earnings in the fiscal third quarter has been stable at 33 cents in the past 60 days.
Against this backdrop, let’s take a look at the factors that might have shaped the company’s July-quarter performance.
Despite the recent increase in coronavirus cases in the United States, thanks to the Delta variant, economic activities are picking up and compare favorably with the year-ago levels. We expect REV Group, which competes with the likes of Winnebago Industries (WGO Quick QuoteWGO ) , Thor Industries (THO Quick QuoteTHO ) and Blue Bird Corporation (BLBD Quick QuoteBLBD ) to post higher year-over-year net sales in the to-be-reported results. Net sales are likely to have been boosted by upbeat performances at the Fire and Emergency (F&E) and Recreation segments.
Net sales at the F&E segment are likely to have been boosted by increased shipments of fire apparatus and price realizations within the fire division. The Zacks Consensus Estimate for segmental sales growth in the fiscal third quarter is currently pegged at 9%, indicating a rise from the third-quarter fiscal 2020 actuals. Moreover, the consensus mark for segmental sales in the fiscal third quarter is currently pegged at $334 million, implying growth from $307 million reported a year ago.
Sales at the recreation segment for the to-be-reported quarter are likely to have gained from higher shipments in all product categories. The Zacks Consensus Estimate for segmental sales in the fiscal third quarter is currently pegged at $231 million, suggesting growth from $183 million reported a year ago.
However, net sales at the commercial segment are likely to have suffered due to the divestiture of two shuttle bus businesses last year, and lower shipments of school buses and municipal transit buses due to coronavirus-led disruptions.
What Does the Zacks Model Say?
The proven Zacks model does not predict an earnings beat for REV Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: REV Group has an Earnings ESP of 0.00% with the Most Accurate Estimate being in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: REV Group carries a Zacks Rank #3, currently.
Highlights of Fiscal Q2 Earnings
REV Group’s earnings (excluding 6 cents from non-recurring items) of 37 cents per share for the second quarter of fiscal 2021 surpassed the Zacks Consensus Estimate of 22 cents. Operating revenues of $643.6 million too surpassed the consensus mark of $624.8 million and increased 17.7% on a year-over-year basis.