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What's in Store for SS&C Technologies (SSNC) in Q1 Earnings?

Zacks Equity Research

SS&C Technologies Holdings, Inc. SSNC is set to report first-quarter 2019 results on Apr 30. Notably, the company surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters, with an average positive earnings surprise of 5.98%.

Past-Quarter Performance

SS&C Technologies had reported fourth-quarter fiscal 2018 non-GAAP earnings of 95 cents per share which beat the Zacks Consensus Estimate of 85 cents and surged 75.9% from the year-ago quarter.

Revenues of $1.13 billion surpassed the Zacks Consensus Estimate by 1.77%. The figure was also higher than the year-ago quarter’s revenues of $438.37 million.

SS&C Technologies Holdings, Inc. Price and EPS Surprise

 

SS&C Technologies Holdings, Inc. Price and EPS Surprise | SS&C Technologies Holdings, Inc. Quote

What to Expect in Q1

The Zacks Consensus Estimate for first-quarter earnings is pegged at 88 cents per share, representing an increase of 66% from the year-ago reported figure. Moreover, the Zacks Consensus Estimate for revenues stands at $1.15 billion, suggesting an improvement of 173.4% from the year-ago reported figure.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

SS&C Technologies’ continuous efforts to strengthen its cloud-based and AI technologies are likely to drive the top line in first quarter. Growing demand for software enabled-services and software as a service (SaaS) solutions and continued cost cutting measures from the company’s end is expected to positively impact the to-be-reported quarter results.

Additionally, the recent DST Advent and Intralinks acquisitions will help SS&C Technologies to increase automation and efficiency across wealth management account servicing and aid expansion into newer markets.  The company’s acquisition synergies and expansion is likely to favor first-quarter results.

Further, strong focus on product innovation and introducing new products gives the company a competitive edge against its peers, which in turn is likely to impact top line in the quarter under review.

Moreover, operating margin at DST business were 33.3% in the fourth quarter and total operating margins also improved year over year, we believe margins to improve in first quarter due to the acceleration in DST business and main businesses.

However, ballooning debt levels have been troubling SS&C Technologies for quite some time now. Moreover, any downturn in macroeconomic and foreign exchange volatility conditions is likely to make it difficult for the company to pay or refinance debts, which is likely to impact the quarter under review.

What the Zacks Model Unveils

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. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

SS&C Technologies has a Zacks Rank #2 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.

Stocks With Favorable Combination

Here are some stocks worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Here are a few stocks that are worth considering as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Xilinx, Inc. XLNX has an Earnings ESP of +2.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lockheed Martin Corporation LMT has an Earnings ESP of +2.05% and a Zacks Rank #2.

Pfizer Inc. PFE has an Earnings ESP of +0.65% and a Zacks Rank #3.

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