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What's in the Offing for Lincoln (LINC) in Q3 Earnings?

Zacks Equity Research

Lincoln Educational Services Corporation’s LINC third-quarter 2019 results are expected to reflect year-over-year increase in earnings and revenues, courtesy of successful execution of strategic initiatives. Its business has been navigating the stringent labor market by collaborating with various corporate partners to enhance student experience.

In the last reported quarter, the company’s top and bottom lines surpassed the Zacks Consensus Estimate by 1.8% and 25%, respectively. The upside was mainly attributable to successful execution of strategies and cost-saving initiatives. These tailwinds are likely to have added benefited its third-quarter earnings as well.

However, legal and regulatory issues faced by Lincoln and its peers like Laureate Education, Inc. LAUR, Strategic Education Inc. STRA and Career Education Corporation CECO, along with increased competition and higher expenses for various programs might have pressurized margins.

Earnings & Revenue Expectation

The Zacks Consensus Estimate for Lincoln’s third-quarter earnings is pegged at 9 cents per share, implying 550% improvement from the year-ago reported loss of 2 cents. The consensus mark for revenues is $72.34 million, indicating growth of 3.2% from the year-ago quarter.

Lincoln Educational Services Corporation Price and EPS Surprise

Lincoln Educational Services Corporation Price and EPS Surprise

Lincoln Educational Services Corporation price-eps-surprise | Lincoln Educational Services Corporation Quote

Key Factors to Note

Lincoln’s ongoing strategies like collaboration with notable Fortune 500 companies, investing in productive marketing channels, focus on cost-control efforts and launching new programs for potential candidates are likely to reflect on third-quarter results.

The company has been working closely with large national companies that provide students with excellent employment opportunities and enhance their skills using equipment donated by its partners. Additionally, the company keeps on surveying different local markets to understand employers’ needs.

Notably, the Healthcare and Other Professions segment, and Transportation and Skilled Trades unit are major contributors to the company’s profitability. In the last reported quarter, it had seen double-digit growth in operating income in both the segments and we expect the trend to have continued in the quarter to be reported.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Lincoln this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lincoln has a Zacks Rank #3 and 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.

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Strategic Education Inc. (STRA) : Free Stock Analysis Report
Lincoln Educational Services Corporation (LINC) : Free Stock Analysis Report
Career Education Corporation (CECO) : Free Stock Analysis Report
Laureate Education Inc. (LAUR) : Free Stock Analysis Report
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