Infosys (INFY) to Report Q4 Earnings: What's in the Offing?
Infosys Limited INFY is scheduled to report fourth-quarter fiscal 2022 results before market open on Apr 13.
Over the trailing four quarters, the India-based IT services provider’s earnings beat the Zacks Consensus Estimate once and met the same on three occasions, the average beat being 1.5%.
In the last reported quarter, Infosys’ adjusted earnings of 18 cents per share surpassed the Zacks Consensus Estimate by a penny and grew 11.2% year over year. Revenues of $4.25 billion jumped 20.9% year over year and surpassed the Zacks Consensus Estimate of $4.08 billion.
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $4.30 billion, suggesting a 19.1% increase from the year-ago period. The consensus mark for earnings stands at 19 cents per share, 18.8% higher than the year-ago quarter.
Let’s see how things have shaped up before this announcement.
Infosys Limited Price and EPS Surprise
Infosys Limited price-eps-surprise | Infosys Limited Quote
Factors Likely to Impact Q4 Results
Infosys’ fourth-quarter performance is likely to have benefited from stellar demand for the cloud, data-analytics solutions and services, the Internet of Things and security products and solutions. Also, higher investments by clients in digital transformation, AI and automation are anticipated to have been conducive to its fiscal fourth-quarter performance.
Continued large deal wins and the growth in digital services are likely to have driven INFY’s quarterly revenues during the to-be-reported quarter. The company’s efforts to reinforce digital-transformation capabilities for expanding and solidifying its position in the highly competitive environment are a steady tailwind.
Notably, Infosys added 111 clients during the third quarter of fiscal 2022. It also signed multiple large deals of a contract value worth $2.53 billion.
The growing traction of its solutions and services in the commercial and corporate banks, consumer, cost and payments, wealth management and custody and mortgage portfolios of its business is likely to have been an upside during the quarter under review.
However, inflated investments in sales and localization and the rising costs to grab large deals might have hurt Infosys’ bottom line during the quarter under discussion.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for INFY this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Infosys carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Apple AAPL, Zendesk ZEN and Fortive FTV have the right combination of elements to post an earnings beat in their upcoming releases.
Apple is slated to report second-quarter fiscal 2022 results on Apr 28. The company carries a Zacks Rank #2 and has an Earnings ESP of +3.30% at present. Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for quarterly earnings is pegged at $1.43 per share, suggesting a year-over-year improvement of 2.1%. AAPL’s quarterly revenues are estimated to increase 5.3% year over year to $94.3 billion.
Zendesk carries a Zacks Rank #3 and has an Earnings ESP of +20.35%. The company is scheduled to report first-quarter 2022 results on Apr 28. Zendesk’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being 5.9%.
The Zacks Consensus Estimate for ZEN’s first-quarter earnings is pegged at 14 cents per share, indicating a year-over-year decline of 17.7%. The consensus mark for revenues stands at $384.3 million, suggesting a year-over-year increase of 28.9%.
Fortive currently carries a Zacks Rank #3 and has an Earnings ESP of +0.30%. The company is slated to report its first-quarter 2022 results on Apr 28. Fortive’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 4%.
The Zacks Consensus Estimate for Fortive’s first-quarter earnings stands at 68 cents per share, implying a year-over-year increase of 7.9%. FTV is estimated to report revenues of $1.35 billion, which suggests growth of 6.9% from the year-ago quarter.
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