Federal Signal (FSS) Q4 Earnings Report Preview: What To Look For

Safety and security company Federal Signal (NYSE:FSS) will be announcing earnings results this Wednesday before the bell. Here’s what to look for.

Federal Signal beat analysts’ revenue expectations last quarter, reporting revenues of $555 million, up 17% year on year. It was a strong quarter for the company, with full-year EPS guidance beating analysts’ expectations and an impressive beat of analysts’ revenue estimates.

This quarter, the market is expecting Federal Signal’s revenue to grow 15.5% year on year, improving from the 5.3% 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 to 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 Q4 results, giving us a hint as to what we can expect. Trinity’s revenues decreased 2.9% year on year, beating analysts’ expectations by 7.1%, and PACCAR reported a revenue decline of 13.7%, topping estimates by 2.5%. Trinity traded up 10.7% following the results while PACCAR’s stock price was unchanged.

There has been positive sentiment among investors in the heavy transportation equipment segment, with share prices up 4.3% on average over the last month. Federal Signal is up 1.9% during the same time and is heading into earnings with an average analyst price target of $133.83 (compared to the current share price of $115.77).