Splunk Inc (SPLK) is scheduled to release its second quarter 2014 results on Aug 29, 2013. Splunk posted a negative surprise of 33.33% in the first quarter. The company has posted an average negative surprise of 72.2% over the trailing four quarters. Let’s see how things are shaping up for the company this quarter.
Growth Factors this Past Quarter
Revenues surged 53.8% year over year to $57.2 million and were above management’s guided range of $52.0 to $54.0 million. Revenues also beat the Zacks Consensus Estimate of $53.0 million.
Strong license sales and maintenance & services revenues led to the better-than-expected year-over-year result. In the first quarter, Splunk signed 132 orders, worth more than $100K, compared with 73 in the year-ago quarter and 171 in the previous quarter.
The Zacks Consensus Estimate for the second quarter projects loss of 11 cents per share while that for fiscal 2014 stands at a loss of 36 cents per share. There have been no revisions in the second quarter and full year 2014 estimates over the last 60 days.
The lack of any movement in estimates signals that the second quarter might not be too different from the past quarters. This is also indicated by that fact that the stock carries a Zacks Rank #3 (Hold).
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
Our model states that a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, #2 or #3 to beat earnings estimates. You could, however, consider the following stocks that satisfy both criteria:
Inteliquent Inc (IQNT) has a Zacks Rank #1 (Strong Buy) and Earnings ESP of +66.67%.
Fuel Systems Solutions (FSYS) has a Zacks Rank #1 (Strong Buy) and Earnings ESP of +25.00%.
Echelon Corp. (ELON) has a Zacks Rank #2 (Buy) and Earnings ESP of +11.11%.
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