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Can Linde (LIN) Keep the Earnings Surprise Streak Alive in Q3?

Linde plc LIN is set to report third-quarter 2021 results on Oct 28, before the opening bell.

In the last reported quarter, the company’s earnings of $2.70 per share beat the Zacks Consensus Estimate of $2.56 owing to increased demand from end markets and project start-ups that led to higher volumes and prices.

The leading global industrial gases and engineering company beat the Zacks Consensus Estimate for earnings in the prior four reported quarters, delivering an earnings surprise of 8.1%, on average. This is depicted in the graph below:

Linde plc Price and EPS Surprise

Linde plc price-eps-surprise | Linde plc Quote

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

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of $2.69 per share has seen no upward revision and one downward movement in the past seven days. The figure suggests an increase of 25.1% from the year-ago quarter.

Further, the Zacks Consensus Estimate for revenues of $7.7 billion suggests an 11.6% rise from the prior-year quarter.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Linde 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 an earnings beat.

Earnings ESP: Linde has an Earnings ESP of +0.19%. You can uncover the best stocks to buy or sell before they are reported with our /" target="_blank" rel="nofollow" rel="nofollow">">Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Factors Driving the Better-Than-Expected Earnings

Industrial production in the United States increased drastically in the September quarter of this year compared to the year-ago comparable quarter. The outperformance is owing to economic reopening, thanks to the rollout of coronavirus vaccines. Since Linde produces industrial gases used across numerous industries, the company is likely to have generated revenues from its Americas business unit. The Zacks Consensus Estimate for its third-quarter 2021 sales from the Americas unit is pegged at $3,169 million, suggesting an increase from $2,641 million in the third quarter of 2020.

The business scenario was probably favorable in Europe. In Germany – the largest economy in the Eurozone area – industrial production improved significantly. The Zacks Consensus Estimate for its third-quarter 2021 sales from the EMEA (Europe, Middle East & Africa) unit is pegged at $1,929 million, suggesting an increase from $1,622 million in the third quarter of 2020.

Other Stocks That Warrant a Look

Here are some other firms that you may want to consider as these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Albemarle Corporation ALB has an Earnings ESP of +8.73% and is a Zacks #3 Ranked player. The company is scheduled to release third-quarter results on Nov 3. You can see /" target="_blank" rel="nofollow" rel="nofollow"> _1link">the complete list of today’s Zacks #1 Rank stocks here.

MP Materials Corp. MP has an Earnings ESP of +20.37% and a Zacks Rank of 2. It is scheduled to report third-quarter results on Nov 4.

The Chemours Company CC has an Earnings ESP of +5.70% and a Zacks Rank #2. The firm is scheduled to release third-quarter earnings on Nov 4.

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