F5 Networks Inc. (FFIV) is scheduled to report the fourth-quarter 2014 results on Oct 29. Last quarter, the company posted a positive earnings surprise of 1.90%. Let’s see how things are shaping up for this announcement.
Factors to Consider
F5 Networks reported better-than-expected third-quarter fiscal 2014 results and provided encouraging fourth-quarter guidance. Revenue growth seems to be steady and was positively impacted by strength across all its business segments, (particularly in security products) and greater-than-expected demand for systems and application services.
We believe that the company’s product refreshes will boost revenues, going forward. Moreover, these initiatives are expected to expand the company’s total addressable market and result in client wins.
Better execution and focus on enterprise and service providers have placed F5 Networks well in the application delivery controller market. The company is also keen on expanding its cloud exposure.
Nevertheless, a volatile spending atmosphere and competition from Juniper Networks (JNPR) and Cisco Systems (CSCO) remain the concerns.
Earnings Whispers?
Our proven model does not conclusively show that F5 Networks is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP for F5 Networks is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.22 per share.
Zacks Rank: F5 Networks carries a Zacks Rank #3 (Hold) which when combined with an ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Facebook, Inc. (FB), with an Earnings ESP of +6.25% and a Zacks Rank #2 (Buy).
The Walt Disney Company (DIS), with an Earnings ESP of +3.41% and a Zacks Rank #2.
Cirrus Logic (CRUS), with an Earnings ESP of +12.77% and a Zacks Rank #3.
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