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Is a Beat Likely for DXC Technology (DXC) in Q2 Earnings?
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DXC Technology (DXC - Free Report) is likely to beat expectations when it reports second-quarter fiscal 2023 results after market close on Nov 3.
For the second quarter of fiscal 2023, the company anticipates revenues between $3.55 billion and $3.58 billion. The Zacks Consensus Estimate for fiscal second-quarter revenues stands at $3.56 billion, indicating a year-over-year decline of 11.7%.
DXC anticipates non-GAAP earnings between 70 cents and 75 cents per share. The consensus mark for earnings is pegged at 72 cents per share, suggesting a 20% year-over-year decline.
The company’s earnings outpaced estimates in two of the trailing four quarters and missed in the remaining two, with a negative average surprise of 4.4%.
DXC’s fiscal second-quarter performance is likely to have been negatively impacted by the business operation closure in Russia following the Kremlin force’s invasion of Ukraine. On its fourth-quarter fiscal 2022 earnings conference call, the company stated that the exit from Russia would reduce its total revenues by approximately $140 million in fiscal 2023.
The strong U.S. dollar against major currencies and the concluded divestments of certain business units in the past 12 months are also anticipated to have negatively impacted the fiscal second-quarter top line. The company projected unfavorable foreign currency exchange rates and divestitures to reduce fiscal second-quarter sales by $290 million and $93 million, respectively, and by $1 billion and $325 million in full-fiscal 2023.
Apart from this, a weak traditional business is likely to have weighed on the to-be-reported quarter's performance. However, sequential revenue stabilization is expected to have continued.
However, the negative impacts of the aforementioned factors are likely to have been partially offset by DXC’s strength in the digital business and partnerships, which have been helping it to expand in the cloud computing space. Increased IT spending is anticipated to have contributed to the top line in the quarter to be reported.
Moreover, margins are anticipated to have benefited from the company’s cost-saving initiatives and reduction in debts, which are likely to have lowered its interest expenses during the quarter. DXC projects the adjusted EBIT margin in the range of 7-7.5% in the fiscal second quarter.
Earnings Whispers
Our proven model predicts an earnings beat for DXC this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (73 cents per share) and the Zacks Consensus Estimate (71 cents per share), is +0.99%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: DXC carries a Zacks Rank #3.
Other Stocks With the Favorable Combination
Per our model, Pyxis Tankers (PXS - Free Report) , Helmerich & Payne (HP - Free Report) and Copa Holdings (CPA - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.
Pyxis has an Earnings ESP of +12.82% and sports a Zacks Rank #1. The company is anticipated to report its third-quarter 2022 results on Nov 21. Pyxis’ earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the negative average surprise being 30.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PXS’s third-quarter earnings is pegged at 39 cents per share, indicating a 197.5% surge from the year-ago quarter’s loss of 40 cents per share. The consensus mark for revenues stands at $16.4 million, suggesting a year-over-year increase of 134%.
Helmerich has an Earnings ESP of +14.32% and currently sports a Zacks Rank #1. The company is slated to report its fourth-quarter fiscal 2022 results on Nov 16. Helmerich’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters and missed on one occasion, the average surprise being 118.2%.
The Zacks Consensus Estimate for HP’s fiscal fourth-quarter earnings stands at 43 cents per share, implying a year-over-year increase of 169.4%. Helmerich is estimated to report revenues of $591.4 million, which suggests a surge of 72% from the year-ago quarter.
Copa Holdings has an Earnings ESP of +0.26% and carries a Zacks Rank #2 at present. The company is slated to report its third-quarter 2022 results on Nov 16. CPA’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 174.2%.
The Zacks Consensus Estimate for quarterly earnings is pegged at $2.63 per share, suggesting a year-over-year increase of 275.7%. Copa’s quarterly revenues are estimated to increase 83.4% year over year to $816.2 billion.
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Is a Beat Likely for DXC Technology (DXC) in Q2 Earnings?
DXC Technology (DXC - Free Report) is likely to beat expectations when it reports second-quarter fiscal 2023 results after market close on Nov 3.
For the second quarter of fiscal 2023, the company anticipates revenues between $3.55 billion and $3.58 billion. The Zacks Consensus Estimate for fiscal second-quarter revenues stands at $3.56 billion, indicating a year-over-year decline of 11.7%.
DXC anticipates non-GAAP earnings between 70 cents and 75 cents per share. The consensus mark for earnings is pegged at 72 cents per share, suggesting a 20% year-over-year decline.
The company’s earnings outpaced estimates in two of the trailing four quarters and missed in the remaining two, with a negative average surprise of 4.4%.
DXC Technology Company. Price and EPS Surprise
DXC Technology Company. price-eps-surprise | DXC Technology Company. Quote
Factors at Play
DXC’s fiscal second-quarter performance is likely to have been negatively impacted by the business operation closure in Russia following the Kremlin force’s invasion of Ukraine. On its fourth-quarter fiscal 2022 earnings conference call, the company stated that the exit from Russia would reduce its total revenues by approximately $140 million in fiscal 2023.
The strong U.S. dollar against major currencies and the concluded divestments of certain business units in the past 12 months are also anticipated to have negatively impacted the fiscal second-quarter top line. The company projected unfavorable foreign currency exchange rates and divestitures to reduce fiscal second-quarter sales by $290 million and $93 million, respectively, and by $1 billion and $325 million in full-fiscal 2023.
Apart from this, a weak traditional business is likely to have weighed on the to-be-reported quarter's performance. However, sequential revenue stabilization is expected to have continued.
However, the negative impacts of the aforementioned factors are likely to have been partially offset by DXC’s strength in the digital business and partnerships, which have been helping it to expand in the cloud computing space. Increased IT spending is anticipated to have contributed to the top line in the quarter to be reported.
Moreover, margins are anticipated to have benefited from the company’s cost-saving initiatives and reduction in debts, which are likely to have lowered its interest expenses during the quarter. DXC projects the adjusted EBIT margin in the range of 7-7.5% in the fiscal second quarter.
Earnings Whispers
Our proven model predicts an earnings beat for DXC this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (73 cents per share) and the Zacks Consensus Estimate (71 cents per share), is +0.99%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: DXC carries a Zacks Rank #3.
Other Stocks With the Favorable Combination
Per our model, Pyxis Tankers (PXS - Free Report) , Helmerich & Payne (HP - Free Report) and Copa Holdings (CPA - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.
Pyxis has an Earnings ESP of +12.82% and sports a Zacks Rank #1. The company is anticipated to report its third-quarter 2022 results on Nov 21. Pyxis’ earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the negative average surprise being 30.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PXS’s third-quarter earnings is pegged at 39 cents per share, indicating a 197.5% surge from the year-ago quarter’s loss of 40 cents per share. The consensus mark for revenues stands at $16.4 million, suggesting a year-over-year increase of 134%.
Helmerich has an Earnings ESP of +14.32% and currently sports a Zacks Rank #1. The company is slated to report its fourth-quarter fiscal 2022 results on Nov 16. Helmerich’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters and missed on one occasion, the average surprise being 118.2%.
The Zacks Consensus Estimate for HP’s fiscal fourth-quarter earnings stands at 43 cents per share, implying a year-over-year increase of 169.4%. Helmerich is estimated to report revenues of $591.4 million, which suggests a surge of 72% from the year-ago quarter.
Copa Holdings has an Earnings ESP of +0.26% and carries a Zacks Rank #2 at present. The company is slated to report its third-quarter 2022 results on Nov 16. CPA’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 174.2%.
The Zacks Consensus Estimate for quarterly earnings is pegged at $2.63 per share, suggesting a year-over-year increase of 275.7%. Copa’s quarterly revenues are estimated to increase 83.4% year over year to $816.2 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.