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Will Broadridge (BR) Beat Earnings?

Zacks Equity Research

Broadridge Financial Solutions, Inc. (BR) is set to report first-quarter 2014 results on Nov 7. Last quarter, it posted a 6.48% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Broadridge’s fourth-quarter results were impressive as both the top and bottom lines surpassed the Zacks Consensus Estimate. Better-than-expected revenues resulted from Broadridge’s solid closed sales, mainly on account of a significant client win for its new post-trade processing solution.

Also, cost reduction initiatives and solid growth in net new businesses were the quarter’s positive. We remain optimistic on Broadridge’s strategic acquisitions, new product launches, share repurchase program and dividend hike. We also believe that its close association with Accenture (ACN) will benefit Broadridge, going forward.

Earnings Whispers?

Our proven model does not conclusively show that Broadridge 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 20 cents. Hence, the difference is 0.00%.

Zacks Rank: Broadridge’s 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 are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter: 

Memorial Production Partners LP (MEMP), with Earnings ESP of +6.25% and a Zacks Rank #1 (Strong Buy).

Best Buy Co., Inc. (BBY), with Earnings ESP of +30.0% and a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on BR
Read the Full Research Report on MEMP
Read the Full Research Report on ACN
Read the Full Research Report on BBY

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