Symantec Corp. (SYMC) is set to report first-quarter 2015 results on Aug 6, 2014. Last quarter, the company posted a positive earnings surprise of 10.5%. Moreover, it is worth noting that Symantec has outperformed the Zacks Consensus Estimate in all the four preceding quarters with an average positive surprise of 19.2%.
Let us see how things are shaping up for this announcement.
Growth Factors this Past Quarter
In the last reported quarter, Symantec delivered modest results. Revenues across all its segments declined due to lower-than-expected demand. However, restructuring benefits aided operating margins, which in turn supported net income.
Continued investments to launch new and innovative products could also impact margins in the near term. Nonetheless, investments in growth areas such as Enterprise backup, Storage Management and Security businesses are expected to drive the company’s long-term prospective. Moreover, Symantec’s restructuring initiatives and share buyback plans are expected to support the company’s bottom line.
Nonetheless, competition from other enterprise security providers and the uncertainty over PC sales remain the headwinds.
Earnings Whispers?
Our proven model does not conclusively show that Symantec 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 37 cents. Hence, the difference is 0.00%.
Zacks Rank: Symantec carries a Zacks Rank #3 (Hold) which 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, which you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Cognizant Technology Solutions Corporation (CTSH) has an Earnings ESP of +5.09% and holds a Zacks Rank #1 (Strong Buy)
First Solar, Inc. (FSLR) has an Earnings ESP of +6.06% and a Zacks Rank #1
Cognex Corporation (CGNX) has an Earnings ESP of +12.00% and a Zacks Rank #1
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