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Analyst Blog

Thomson Reuters Corporation (TRI - Snapshot Report), provider of information related to financial & risk, legal, tax & accounting, and intellectual property & science, is slated to report second-quarter 2014 results on Jul 30. In the last quarter, it delivered a positive surprise of 17.95%. Let’s see how things are shaping up for this announcement.

Factors Influencing This Quarter

The macroeconomic headwinds in Europe and regulatory changes remain concerns for the company that may adversely impact the top line. Moreover, loss of market share in the financial sector due to increasing competition from Bloomberg also remains a threat. Management expects a mid-to-high single-digit decline across its U.S. print revenue within the Legal segment.

Earnings Whispers?

Our proven model does not conclusively show that Thomson Reuters 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 Thomson Reuters is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 47 cents.

Zacks Rank: Thomson Reuters has a Zacks Rank #4 (Sell) which lowers the predictive power of ESP. We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements:

Exponent Inc. (EXPO - Snapshot Report) has an Earnings ESP of +1.43% and a Zacks Rank #3 (Hold).

Navigant Consulting Inc. (NCI - Analyst Report) has an Earnings ESP of +4.00% and a Zacks Rank #3.

Time Warner Inc. (TWX - Analyst Report) has an Earnings ESP of +1.19% and a Zacks Rank #3.

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