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F5 (FFIV) Readies to Report Q3 Earnings: What's in the Offing?
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F5 (FFIV - Free Report) is scheduled to report third-quarter fiscal 2023 results on Jul 24.
For the fiscal third quarter, F5 estimates revenues in the range of $690-$710 million ($700 million at the midpoint). The Zacks Consensus Estimate for revenues is pegged at $698.6 million, suggesting a year-over-year increase of 3.6%.
The company anticipates non-GAAP earnings in the range of $2.78-$2.90 per share ($2.84 at the midpoint). The Zacks Consensus Estimate stands at $2.86 per share, indicating a year-over-year increase of approximately 11.3%. Earnings estimates for the quarter have remained unchanged over the past 60 days.
The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 7.1%.
The persistent macro uncertainty and its impact on customer spending are likely to have negatively impacted F5’s third-quarter top line, particularly the Product segment, which comprises Software and Systems sub-divisions. Our estimate of $333.8 million for Product segment revenues indicates a year-over-year improvement of 2.3%, which is much lower than the increase of 14.5% registered in the second quarter.
Softness in the Software sub-segment’s performance is anticipated to have weighed on the Product division’s overall performance. On its second-quarter earnings conference call, the company stated that it no longer sees 15% to 20% year-over-year growth in Software revenues in fiscal 2023, considering recent quarters’ performances and the current environment for new software projects.
In the second quarter, revenues from the Software sub-segment declined 13% year over year to $131.9 million. Our estimate for Software’s third-quarter revenues is currently pegged at $143.7 million, depicting a 19.7% drop from the year-ago quarter.
However, the recovery in the Systems sub-division is likely to have more than offset the weak performance of Software. An improvement in the supply chain is likely to have helped the company clear the backlog for its Systems products in the third quarter. This is likely to have boosted its Systems sub-segment revenues during the to-be-reported quarter. Our estimate of $190.1 million for Systems’ revenues indicates robust 28.9% year-over-year growth.
Furthermore, high-maintenance renewals and a positive impact of the price increase introduced in the fourth quarter fiscal of 2022 are expected to have boosted F5’s Services segment revenues in the third quarter. Our estimate for the Services division’s third-quarter revenues is pegged at $362.4 million, suggesting an expected 4.1% increase from the year-ago quarter’s $348 million.
Additionally, the company’s cost-saving initiatives, which include headcount reduction, eliminating portions of its facilities footprint and travel reduction, are likely to have boosted the bottom line in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for FFIV this 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. However, that’s not the case here.
Though F5 carries a Zacks Rank #3 at present, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Apple (AAPL - Free Report) , Block (SQ - Free Report) and Alibaba (BABA - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Apple carries a Zacks Rank #3 and has an Earnings ESP of +10.19%. The company is scheduled to report third-quarter fiscal 2023 results on Aug 3. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, with the average surprise being 2.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Apple’s third-quarter earnings stands at $1.20 per share, flat with the year-ago quarter. It is estimated to report revenues of $81.21 billion, which suggests a decrease of approximately 2.1% from the year-ago quarter.
Block is slated to report second-quarter 2023 results on Aug 3. The company has a Zacks Rank #3 and an Earnings ESP of +12.99% at present. Block’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on one occasion and matching it once, the average surprise being 22.6%.
The Zacks Consensus Estimate for second-quarter earnings is pegged at 35 cents per share, suggesting a whopping increase of 94.4% from the year-ago quarter’s earnings of 18 cents. Block’s quarterly revenues are estimated to increase 15.4% year over year to $5.08 billion.
Alibaba carries a Zacks Rank #3 and has an Earnings ESP of +6.19%. The company is anticipated to report first-quarter fiscal 2024 results on Aug 3. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 16.9%.
The Zacks Consensus Estimate for BABA’s first-quarter earnings is pegged at $1.90 per share, indicating a year-over-year increase of 8.6%. The consensus mark for revenues stands at $31.21 billion, suggesting a year-over-year rise of 1.7%.
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F5 (FFIV) Readies to Report Q3 Earnings: What's in the Offing?
F5 (FFIV - Free Report) is scheduled to report third-quarter fiscal 2023 results on Jul 24.
For the fiscal third quarter, F5 estimates revenues in the range of $690-$710 million ($700 million at the midpoint). The Zacks Consensus Estimate for revenues is pegged at $698.6 million, suggesting a year-over-year increase of 3.6%.
The company anticipates non-GAAP earnings in the range of $2.78-$2.90 per share ($2.84 at the midpoint). The Zacks Consensus Estimate stands at $2.86 per share, indicating a year-over-year increase of approximately 11.3%. Earnings estimates for the quarter have remained unchanged over the past 60 days.
The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 7.1%.
F5, Inc. Price and EPS Surprise
F5, Inc. price-eps-surprise | F5, Inc. Quote
Factors to Consider
The persistent macro uncertainty and its impact on customer spending are likely to have negatively impacted F5’s third-quarter top line, particularly the Product segment, which comprises Software and Systems sub-divisions. Our estimate of $333.8 million for Product segment revenues indicates a year-over-year improvement of 2.3%, which is much lower than the increase of 14.5% registered in the second quarter.
Softness in the Software sub-segment’s performance is anticipated to have weighed on the Product division’s overall performance. On its second-quarter earnings conference call, the company stated that it no longer sees 15% to 20% year-over-year growth in Software revenues in fiscal 2023, considering recent quarters’ performances and the current environment for new software projects.
In the second quarter, revenues from the Software sub-segment declined 13% year over year to $131.9 million. Our estimate for Software’s third-quarter revenues is currently pegged at $143.7 million, depicting a 19.7% drop from the year-ago quarter.
However, the recovery in the Systems sub-division is likely to have more than offset the weak performance of Software. An improvement in the supply chain is likely to have helped the company clear the backlog for its Systems products in the third quarter. This is likely to have boosted its Systems sub-segment revenues during the to-be-reported quarter. Our estimate of $190.1 million for Systems’ revenues indicates robust 28.9% year-over-year growth.
Furthermore, high-maintenance renewals and a positive impact of the price increase introduced in the fourth quarter fiscal of 2022 are expected to have boosted F5’s Services segment revenues in the third quarter. Our estimate for the Services division’s third-quarter revenues is pegged at $362.4 million, suggesting an expected 4.1% increase from the year-ago quarter’s $348 million.
Additionally, the company’s cost-saving initiatives, which include headcount reduction, eliminating portions of its facilities footprint and travel reduction, are likely to have boosted the bottom line in the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for FFIV this 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. However, that’s not the case here.
Though F5 carries a Zacks Rank #3 at present, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Apple (AAPL - Free Report) , Block (SQ - Free Report) and Alibaba (BABA - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Apple carries a Zacks Rank #3 and has an Earnings ESP of +10.19%. The company is scheduled to report third-quarter fiscal 2023 results on Aug 3. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, with the average surprise being 2.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Apple’s third-quarter earnings stands at $1.20 per share, flat with the year-ago quarter. It is estimated to report revenues of $81.21 billion, which suggests a decrease of approximately 2.1% from the year-ago quarter.
Block is slated to report second-quarter 2023 results on Aug 3. The company has a Zacks Rank #3 and an Earnings ESP of +12.99% at present. Block’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on one occasion and matching it once, the average surprise being 22.6%.
The Zacks Consensus Estimate for second-quarter earnings is pegged at 35 cents per share, suggesting a whopping increase of 94.4% from the year-ago quarter’s earnings of 18 cents. Block’s quarterly revenues are estimated to increase 15.4% year over year to $5.08 billion.
Alibaba carries a Zacks Rank #3 and has an Earnings ESP of +6.19%. The company is anticipated to report first-quarter fiscal 2024 results on Aug 3. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 16.9%.
The Zacks Consensus Estimate for BABA’s first-quarter earnings is pegged at $1.90 per share, indicating a year-over-year increase of 8.6%. The consensus mark for revenues stands at $31.21 billion, suggesting a year-over-year rise of 1.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.