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Finance Stocks Q3 Earnings Slated for Nov 9: FSIC, ITG, ECPG

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The Q3 earnings season for the finance sector is almost wrapping up, with most of the companies having already released their results. Performance of the companies so far reflects an overall improvement over the prior-year quarter.

The industry backdrop hasn’t improved much with the persistent low interest rate environment and global growth concerns amid the Brexit vote. However, the rebound in oil prices and several positive domestic economic factors, including strength in housing sector remained the bright spots, which in turn, alleviated the pressure on the finance industry to some extent.

About 88.6% of the S&P 500 companies in the sector have reported results so far. Total earnings for these companies increased 12.7% year over year on a revenue improvement of 6.7%. Notably, 73% companies have surpassed bottom-line expectations and 75.3% beat on the top line.

Per the latest Zacks Earnings Preview report, for third-quarter 2016, overall earnings of the S&P 500 stocks in the Finance sector are expected to be up 11.8% year over year. This compares with a 5.2% decline in earnings in the previous quarter. Revenues are expected to increase 2.2% versus a 15% decrease in the prior quarter.

Our quantitative model offers some insights into stocks that are about to report their earnings. Per the model, in order to be confident of an earnings beat, a stock needs to have the right combination of the two key criteria, a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) – and a positive Earnings ESP.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage of difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.

Let’s see what’s in store for the following companies scheduled to report July-Sep quarter results on Nov 9.

FS Investment Corporation : Estimates has been stable ahead of the company’s third-quarter 2016 earnings release. The Zacks Consensus Estimate of 22 cents for the company reflects a year-over-year increase of 2.4%.

However, the company has a Zacks Rank #3, with an Earnings ESP of 0.00%, making it difficult to conclusively predict earnings beat this quarter. Though a Zacks Rank #3 increases the predictive power of our model, we also need a positive Earnings ESP to be sure of an earnings beat.  You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has reported an average positive earnings surprise of 2.2% over the trailing four quarters.

FS INVESTMENT Price and EPS Surprise

FS INVESTMENT Price and EPS Surprise | FS INVESTMENT Quote

Investment Technology Group, Inc. : The company is expected to record a loss in the in the upcoming release. The Zacks Consensus Estimate is pegged at a loss of 13 cents.

Estimates have been stable lately, ahead of the release of the company’s quarterly results. However, the combination of a Zacks Rank #4 (Sell), with an Earnings ESP of 0.00%, makes prediction difficult for this company as well.

Notably, the company has decent surprise hisrory.

INVEST TECH-NEW Price and EPS Surprise

 

INVEST TECH-NEW Price and EPS Surprise | INVEST TECH-NEW Quote

Encore Capital Group, Inc. (ECPG - Free Report) : The Zacks Consensus Estimate of $1.19 reflects a year-over-year decline of 10.9%. Also, we are not confident of an earnings beat as the company has a Zacks Rank #3, with an Earnings ESP of 0.00%.

Notably, estimates have been stable lately, prior to the company’s third-quarter 2016 earnings release. The company has reported average positive earnings surprise of 14.5% over the trailing four quarters.

ENCORE CAP GRP Price and EPS Surprise

 

ENCORE CAP GRP Price and EPS Surprise | ENCORE CAP GRP Quote

 

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