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Gartner (IT) to Report Q4 Earnings: What's in the Cards?

Zacks Equity Research

Gartner, Inc. IT) is scheduled to report fourth-quarter 2018 results on Feb 5, before market open.

While the company’s top line is expected to be driven by strength across all segments, the bottom line should benefit from the company’s improving operating profitability and gain from divested operations.

Over the past six months, shares of Gartner have gained 2.3% against 4.2% fall of the industry it belongs to. The Zacks S&P 500 composite has declined 6.3% in the same time frame.

 

Let's check out how things are shaping up for the announcement.

Top Line to Benefit from Segmental Strength

The Zacks Consensus Estimate for fourth-quarter 2018 revenues stands at $1.09 billion, indicating year-over-year growth of 7.7%. The upside is likely to be driven by strength across each of the three business segments — Research, Consulting and Events. Notably, the consensus estimate lies within the company guided revenue range of $1.07-$1.12 billion.

In third-quarter 2018, revenues of $921.67 million increased 11.3% year over year.

Going by segments, the consensus estimate for Research revenues is pegged at $806 million, indicating year-over-year growth of 16.3%. The segment should benefit from increase in subscription revenues. In third-quarter 2018, segment revenues of $774.18 million improved 18% year over year.

The consensus mark for Events revenues is pegged at $192 million, indicating year-over-year growth of 15.7%. Increase in attendee and exhibitor revenues should boost the segment.In third-quarter 2018, segment revenues of $57.14 million improved 27% year over year.

The consensus estimate for Consulting revenues is pegged at $93 million, indicating year-over-year growth of 9.4%. Revenue improvements in labor-based core consulting and contract optimization should boost the segment.In third-quarter 2018, segment revenues of $78.75 million improved 9% year over year.

Gartner, Inc. Revenue (TTM)

Gartner, Inc. Revenue (TTM) | Gartner, Inc. Quote

Earnings Likely to Grow Year Over Year

The Zacks Consensus Estimate for Gartner’s earnings in the to-be-reported quarter is pegged at $1.25 per share, indicating year-over-year growth of 6.8%. The bottom line is likely to benefit from improving operating profitability and gain from divested operations. Notably, the consensus estimate lies within the company guided adjusted EPS range of $1.18-$1.34.

In third-quarter 2018, adjusted earnings per share of 85 cents increased 30.7% year over year.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Gartner has a Zacks Rank #3 and an Earnings ESP of -2.53%.

Gartner, Inc. Price and EPS Surprise

Gartner, Inc. Price and EPS Surprise | Gartner, Inc. Quote

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings:

Booz Allen Hamilton BAH has an Earnings ESP of +4.22% and a Zacks Rank #2. The company is slated to release third-quarter fiscal 2019 results on Feb 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

First Data FDC has an Earnings ESP of +3.17% and a Zacks Rank #2. The company is scheduled to release fourth-quarter 2018 results on Feb 6.

IQVIA Holdings IQV has an Earnings ESP of +1.04% and a Zacks Rank #3. The company is slated to report fourth-quarter 2018 results on Feb 14.

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