The earnings season, which is well past the halfway mark, has proved to be one of the strongest in the past seven years with decent performance across the table. About 267 S&P 500 members have already released their results till Apr 27. Total earnings for these companies are up 25.1% year over year on 10% higher revenues, with 76.8% beating earnings estimates and 73.8% surpassing top-line expectations. Based on the hitherto observed pattern, the January-March quarter is anticipated to register healthy double-digit percentage earnings growth on a year-over-year basis.
Per the latest Earnings Preview, overall earnings for all the S&P 500 companies are expected to be up 22.6% on 8.4% growth in revenues. This represents an improved growth projection from the previous quarter, which was driven by a corporate tax overhaul and relatively healthy job data. Experts widely believe that earnings growth is likely to improve steadily in 2018 and beyond. Total earnings for the S&P 500 index are likely to grow 18.5% year over year on 5.5% rise in revenues, which if achieved, would be the highest annual growth rate for the index since 2010.
The Technology sector, of which Telecom forms part, appears to be quite strong. For the sector, earnings are expected to improve 27.9% year over year while revenues are touted to rise 12.5% due to healthy growth dynamics on the back of existing secular trends in cloud computing, artificial intelligence and Big Data.
Let’s take a sneak peek at two major Telecom stocks scheduled to report earnings on May 2 to see how things are shaping up for the upcoming results.
Harris Corporation HRS is scheduled to report third-quarter fiscal 2018 results before the opening bell. The company is likely to report higher revenues in the quarter backed by healthy growth dynamics. During the quarter, Harris was awarded a $161 million contract modification to supply the next production lot of electronic jammers to protect the U.S. Navy and Australian F/A-18 Hornet and Super Hornet aircraft against electronic threats. (Read more: Will Higher Revenues Bolster Harris' Q3 Earnings?)
For the to-be-reported quarter, the company has an Earnings ESP of -0.06%, and Zacks Rank #4 (Sell), making an earnings surprise prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Harris Corporation Price and EPS Surprise
Harris Corporation Price and EPS Surprise | Harris Corporation Quote
Qorvo, Inc. QRVO is scheduled to report fourth-quarter fiscal 2018 results after the closing bell. The company expects delayed product cycle at its largest customer to hurt Mobile Product revenues in the to-be-reported quarter. Moreover, lower demand for smartphones in China is likely to hurt Qorvo’s top-line growth as China accounts for almost 30% of Mobile Product revenues. (Read more: Will Weak Growth in China Hurt Qorvo's Q4 Earnings?)
We remain inconclusive on an earnings beat prediction this quarter as it has an ESP of +0.52% and a Zacks Rank #4.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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