Business Services Q1 Earnings Due on May 4: SRCL, IT & More
The earnings season is picking up steam with over 1,000 companies reporting this week, including 126 S&P 500 members. The 288 S&P 500 companies that reported results till Apr 28, more or less confirm that overall first-quarter results are likely to be the best in about three years.
Total earnings for these 288 companies (accounting for 63.8% of the index’s total market capitalization) are up 13.7% on 8.2% higher revenues, with 76.4% beating earnings estimates and 68.1% surpassing top-line expectations. Based on the hitherto observed pattern, the first quarter is anticipated to register double-digit percentage growth on a year-over-year basis.
Per the latest Earnings Preview, overall first-quarter earnings for all the S&P 500 companies are expected to be up 11.2% on a 6.2% growth in revenues. This represents a healthy improvement from fourth-quarter 2016 that recorded the highest growth in its preceding two years. The relative improvement in the quarterly performance is largely due to a turnaround in the economy, improved job market and rising oil prices. Experts widely believe that earnings growth is likely to continue in double digits in the latter half of 2017 and beyond.
For the first quarter as a whole, about three of the 16 Zacks sectors are expected to witness an earnings decline, with Autos and Transportation being the biggest drag.
The Business Services sector is looking reasonably good this quarter. For the sector, earnings are expected to grow 8.5% year over year while sales are touted to rise 2.8%, driven by higher capital investments. The primary growth drivers in this highly fragmented sector hinge on a healthy economy with decent prospects for job growth, higher disposable income and new business initiatives. On an average, there were 178,000 job additions per month in the first quarter. The unemployment rate rose marginally to 4.5% in March due to higher participation rate of 63% as more people looked for work, a clear indication that the economy is improving. Enjoying the fruits of a resurgent job market, low inflationary pressures and cheaper oil bills, consumer confidence has also held its fort.
Let’s have a sneak peek at four major Business Services stocks scheduled to report first-quarter 2017 earnings tomorrow to see how things are shaping up for the upcoming results.
Stericycle, Inc. SRCL is scheduled to report results after the closing bell. The company is focused on increasing its SQ customer base, as it generates higher gross margins than the LQ customers. The acquisition of Shred-it International is expected to enhance Stericycle’s core compliance solutions portfolio and offer specialized services, thereby augmenting its value proposition to clients and improve revenues. For the impending quarter, we cannot conclusively predict and earnings beat as a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The company has an Earnings ESP of -0.96%, and Zacks Rank #3 making an earnings surprise prediction uncertain (Read more: What Lies Ahead for Stericycle this Earnings Season?)
Stericycle, Inc. Price and EPS Surprise
Stericycle, Inc. Price and EPS Surprise | Stericycle, Inc. Quote
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Gartner, Inc. IT is slated to report earnings before the opening bell. This information technology research and advisory firm topped estimates in each of the trailing four quarters with an average positive surprise of 13.9%. However, we remain inconclusive on earnings beat prediction this quarter as the company has an ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Gartner, Inc. Price and EPS Surprise
Gartner, Inc. Price and EPS Surprise | Gartner, Inc. Quote
Global Payments Inc. GPN is scheduled to report results before the opening bell. During the quarter, this payment solutions firm launched EdgeExpress Cloud – a new platform designed to streamline payments integration with SaaS, Deployed, Mobile and eCommerce software applications. The solution significantly reduces overhead support for merchant customers, accelerates innovative offerings to market and helps in maximizing new sales for software developers. The product is likely to augment the revenues of the company in the to-be-reported quarter. We cannot conclusive predict an earnings beat this quarter as the company has an ESP of 0.00% and a Zacks Rank #4 (Sell).
Global Payments Inc. Price and EPS Surprise
Global Payments Inc. Price and EPS Surprise | Global Payments Inc. Quote
Ritchie Bros. Auctioneers Incorporated RBA is scheduled to report results after the closing bell. This auction service provider conducts unreserved public auctions every year across North and Central America, Europe, Asia, Australia, Africa and the Middle East. It is renowned for its innovative auction methods, attention to detail and total commitment to the unreserved auction. The company beat estimates twice in the last four quarters. However, we cannot conclusive predict an earnings beat this quarter as it has an ESP of -4.17% and a Zacks Rank #3.
Ritchie Bros. Auctioneers Incorporated Price and EPS Surprise
Ritchie Bros. Auctioneers Incorporated Price and EPS Surprise | Ritchie Bros. Auctioneers Incorporated Quote
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Gartner, Inc. (IT): Free Stock Analysis Report
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Stericycle, Inc. (SRCL): Free Stock Analysis Report
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