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What's in Store for Infosys (INFY) This Earnings Season?
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Infosys Limited (INFY - Free Report) is scheduled to report second-quarter fiscal 2021 results on Oct 14.
Over the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate on two occasions, came in line in another and missed in the other, the average beat being 2.1%.
In the last reported quarter, Infosys’ adjusted earnings of 13 cents per share beat the Zacks Consensus Estimate by a penny and remained flat year over year. While revenues of $3.12 billion edged down 0.3% year over year, the reported figure surpassed the Zacks Consensus Estimate of $2.96 billion.
For the fiscal second quarter, the Zacks Consensus Estimate for revenues is pegged at $3.22 billion, suggesting a 0.3% increase from the year-ago quarter. The consensus mark for earnings is pinned at 14 cents, calling for growth of 7.7% year on year.
Let’s see how things have shaped up prior to this announcement.
Key Factors
Business disruptions caused by the coronavirus pandemic might have had a limited impact on Infosys’ fiscal second-quarter performance, as the company had successfully shifted its global workforce to remote working from in-office facilities.
The company had earlier noted that more than 95% of its global workforce has been working remotely. This reflects that the firm managed to run its operations smoothly despite the global lockdown situation.
Furthermore, Infosys’ quarterly performance is likely to have benefited from large deal wins and growth in digital services. The company’s efforts to reinforce the digital-transformation capabilities for expanding and solidifying its position in the highly competitive environment are a steady tailwind.
Moreover, stellar demand for cloud, IoT, security, and data-analytics solutions and services is expected to have driven the company’s quarterly revenues. Also, higher investments by clients in digital transformation, artificial intelligence and automation are anticipated to have been conducive to its fiscal second-quarter performance.
While headwinds in the financial services segment are still a concern, growing traction in the commercial and corporate bank, consumer, cost and payments, wealth management and custody, plus mortgage portfolios of its business is likely to have been a positive during the quarter under review.
Nonetheless, inflated investments in sales and localization, and rising costs to grab large deals are expected to have hurt Infosys’ bottom-line numbers during the quarter under discussion.
What Our Model Says
Our proven model does not predict an earnings beat for Infosys 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.
Infosys currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.
Stocks With Favorable Combination
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:
Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +6.45% and flaunts a Zacks Rank of 1, at present.
Alphabet (GOOGL - Free Report) has an Earnings ESP of +10.23% and carries a Zacks Rank of 2, currently.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
What's in Store for Infosys (INFY) This Earnings Season?
Infosys Limited (INFY - Free Report) is scheduled to report second-quarter fiscal 2021 results on Oct 14.
Over the trailing four quarters, the company’s earnings beat the Zacks Consensus Estimate on two occasions, came in line in another and missed in the other, the average beat being 2.1%.
In the last reported quarter, Infosys’ adjusted earnings of 13 cents per share beat the Zacks Consensus Estimate by a penny and remained flat year over year. While revenues of $3.12 billion edged down 0.3% year over year, the reported figure surpassed the Zacks Consensus Estimate of $2.96 billion.
Infosys Limited Price and Consensus
Infosys Limited price-consensus-chart | Infosys Limited Quote
For the fiscal second quarter, the Zacks Consensus Estimate for revenues is pegged at $3.22 billion, suggesting a 0.3% increase from the year-ago quarter. The consensus mark for earnings is pinned at 14 cents, calling for growth of 7.7% year on year.
Let’s see how things have shaped up prior to this announcement.
Key Factors
Business disruptions caused by the coronavirus pandemic might have had a limited impact on Infosys’ fiscal second-quarter performance, as the company had successfully shifted its global workforce to remote working from in-office facilities.
The company had earlier noted that more than 95% of its global workforce has been working remotely. This reflects that the firm managed to run its operations smoothly despite the global lockdown situation.
Furthermore, Infosys’ quarterly performance is likely to have benefited from large deal wins and growth in digital services. The company’s efforts to reinforce the digital-transformation capabilities for expanding and solidifying its position in the highly competitive environment are a steady tailwind.
Moreover, stellar demand for cloud, IoT, security, and data-analytics solutions and services is expected to have driven the company’s quarterly revenues. Also, higher investments by clients in digital transformation, artificial intelligence and automation are anticipated to have been conducive to its fiscal second-quarter performance.
While headwinds in the financial services segment are still a concern, growing traction in the commercial and corporate bank, consumer, cost and payments, wealth management and custody, plus mortgage portfolios of its business is likely to have been a positive during the quarter under review.
Nonetheless, inflated investments in sales and localization, and rising costs to grab large deals are expected to have hurt Infosys’ bottom-line numbers during the quarter under discussion.
What Our Model Says
Our proven model does not predict an earnings beat for Infosys 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.
Infosys currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.
Stocks With Favorable Combination
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:
Corning Incorporated (GLW - Free Report) has an Earnings ESP of +7.25% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +6.45% and flaunts a Zacks Rank of 1, at present.
Alphabet (GOOGL - Free Report) has an Earnings ESP of +10.23% and carries a Zacks Rank of 2, currently.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>