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What's in the Cards for DXC Technology's (DXC) Q1 Earnings?

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DXC Technology Company (DXC - Free Report) is set to release first-quarter fiscal 2021 results on Aug 6.

The Zacks Consensus Estimate for quarterly revenues is pinned at $4.24 billion, calling for a 13.4% year-over-year decline. The consensus mark for earnings is 11 cents per share, suggesting a 93.7% slump.

The company’s earnings outpaced estimates in three of the trailing four quarters and missed in the other, the average beat being 9.3%.

Let’s see how things have shaped up for the upcoming announcement.

Factors at Play

DXC’s fiscal first-quarter performance is likely to have been affected by the pandemic-induced business disruptions. Soft IT spending as organizations are pushing back their investments in big and expensive technology products, due to the global economic slowdown concerns amid the coronavirus crisis, might have hurt the company’s performance during the quarter to be reported.

Also, during the fourth-quarter fiscal 2020 earnings call, the company had stated that it anticipates revenue loss due to price concessions and terminated businesses to continue in first-quarter fiscal 2021. As a result, the company forecasts an 8-10% sequential decline in the fiscal first-quarter revenues.

Moreover, a weak traditional business is likely to have negatively impacted the top line during the quarter under review.

Furthermore, increased investments in the business and higher interest expenses are expected to have weighed on the company’s quarterly performance.

What Our Model Says

Our proven model does not predict an earnings beat for DXC this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

DXC carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%, at present.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combinations of elements to post an earnings beat this quarter:

Cogent Communications Holdings (CCOI - Free Report) has an Earnings ESP of +11.66% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics (SYNA - Free Report) has an Earnings ESP of +10.6 % and currently carries a Zacks Rank of 2.

Benefitfocus has an Earnings ESP of +6.25% and carries a Zacks Rank of 2, currently.

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