Safety and security company Federal Signal (NYSE: FSS) will be announcing earnings results this Thursday morning. Here’s what to look for.
Federal Signal met analysts’ revenue expectations last quarter, reporting revenues of $670.2 million, up 18.7% year on year. It was a strong quarter for the company, with full-year EPS guidance exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Is Federal Signal a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Federal Signal’s revenue to grow 19.4% year on year, improving from the 17% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Federal Signal has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Federal Signal’s peers in the heavy transportation equipment segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Wabtec delivered year-on-year revenue growth of 8.1%, missing analysts’ expectations by 2.6%, and PACCAR reported revenues up 19%, falling short of estimates by 3.1%. Wabtec traded down 2.5% following the results.
Read our full analysis of Wabtec’s results here and PACCAR’s results here.
In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). While some of the heavy transportation equipment stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 2.7% on average over the last month. Federal Signal’s stock price was unchanged during the same time and is heading into earnings with an average analyst price target of $144.29 (compared to the current share price of $115.78).
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