Will CSC Beat Earnings Estimates? - Analyst Blog
06 Maggio 2014 - 11:44PM
Zacks
Computer Sciences Corporation (CSC) is set to
report fourth-quarter 2014 results on May 8. Last quarter, the
company posted a positive earnings surprise of 18.1%. Let us see
how things are shaping up for this announcement.
Growth Factors This Past Quarter
Computer Sciences posted mixed third-quarter 2014 results wherein
the bottom line surpassed the Zacks Consensus Estimate but the top
line lagged. Moreover, weak performances across all business
segments resulted in the decline in revenues on a year-over-year
basis.
Computer Sciences is adopting a cloud-based model and re-engaging
the salesforce in a more efficient way. We believe that this, along
with its cost rationalization initiatives will enable margin
expansion. Moreover, share buybacks are expected to support the
bottom line.
Furthermore, the company’s traction in the cloud and partnerships
with HCL, AT&T (T), VMware
(VMW), Amazon.com (AMZN) and
Microsoft (MSFT) are expected to drive growth,
going forward.
However, the market is becoming competitive with companies like
CACI International Inc. (CACI) and Accenture
making their presence felt. Delay in the government’s order renewal
process and constricted federal spending are the near-term
headwinds for the company.
Earnings Whispers?
Our proven model does not conclusively show that Computer Sciences
will beat earnings this quarter. That is because a stock needs to
have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for
this to happen. That is not the case here as you will see
below.
Zacks ESP: Both the Most Accurate estimate and the
Zacks Consensus Estimate stand at $1.03. Hence, the difference is
0.00%.
Zacks Rank: Computer Sciences’ Zacks Rank #3
(Hold), when combined with a 0.00% ESP makes surprise prediction
difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here is another company you may want to consider as our model shows
that it has the right combination of elements to post an earnings
beat this quarter:
Intuit Inc. (INTU), Earnings ESP of +1.18% and a
Zacks Rank #2 (Buy).
AMAZON.COM INC (AMZN): Free Stock Analysis Report
CACI INTL A (CACI): Free Stock Analysis Report
COMP SCIENCE (CSC): Free Stock Analysis Report
INTUIT INC (INTU): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VMWARE INC-A (VMW): Free Stock Analysis Report
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