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CA Inc. (CA) to Report Q3 Earnings: Will it Disappoint?
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CA Inc. (CA - Free Report) is set to report third-quarter fiscal 2017 results on Jan 24. Last quarter, the company posted a positive earnings surprise of 10.5%. Let's see how things are shaping up for this announcement.
Factors at Play
CA reported better-than-expected second-quarter results. The year-over-year revenue comparison was also favorable.
CA recently inked an agreement to acquire Austrian business automation software company, Automic Holding GmbH for 600 million euros ($635 million). The acquisition will broaden CA’s portfolio and enable it to better serve its patrons with a complete solution to address the needs of automation across the enterprise. We believe the acquisition synergies will positively impact results in the to-be-reported quarter.
Furthermore, we believe that the increased efficiency offered by the wide range of products will attract customers across sectors, lending stability to the business model. We are positive about CA’s increased cloud exposure. A modest cash position and regular share repurchase are also encouraging.
CA has also adopted a “go to market” sales strategy. This brings together all the commercial functions including sales, marketing, brand management, pricing and consumer insight. The integration of the marketing functions helps to lower costs, thereby improving the bottom line.
On the other hand, increasing competition from Oracle (ORCL - Free Report) , International Business Machines and HP Inc. and exposure to Europe remain the near-term headwinds.
Our proven model does not conclusively show that CA will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Negative Zacks ESP: Its Earnings ESP is -1.75% as the Most Accurate estimate of 56 cents is pegged lower than the Zacks Consensus Estimate of 57 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter
Zacks Rank: CA has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Texas Instruments Incorporated (TXN - Free Report) , with an Earnings ESP of +1.24% and a Zacks Rank #3.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
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CA Inc. (CA) to Report Q3 Earnings: Will it Disappoint?
CA Inc. (CA - Free Report) is set to report third-quarter fiscal 2017 results on Jan 24. Last quarter, the company posted a positive earnings surprise of 10.5%. Let's see how things are shaping up for this announcement.
Factors at Play
CA reported better-than-expected second-quarter results. The year-over-year revenue comparison was also favorable.
CA recently inked an agreement to acquire Austrian business automation software company, Automic Holding GmbH for 600 million euros ($635 million). The acquisition will broaden CA’s portfolio and enable it to better serve its patrons with a complete solution to address the needs of automation across the enterprise. We believe the acquisition synergies will positively impact results in the to-be-reported quarter.
Furthermore, we believe that the increased efficiency offered by the wide range of products will attract customers across sectors, lending stability to the business model. We are positive about CA’s increased cloud exposure. A modest cash position and regular share repurchase are also encouraging.
CA has also adopted a “go to market” sales strategy. This brings together all the commercial functions including sales, marketing, brand management, pricing and consumer insight. The integration of the marketing functions helps to lower costs, thereby improving the bottom line.
On the other hand, increasing competition from Oracle (ORCL - Free Report) , International Business Machines and HP Inc. and exposure to Europe remain the near-term headwinds.
CA Inc. Price and EPS Surprise
CA Inc. Price and EPS Surprise | CA Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that CA will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Negative Zacks ESP: Its Earnings ESP is -1.75% as the Most Accurate estimate of 56 cents is pegged lower than the Zacks Consensus Estimate of 57 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter
Zacks Rank: CA has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Seagate Technology plc (STX - Free Report) , with an Earnings ESP of +1.87% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Texas Instruments Incorporated (TXN - Free Report) , with an Earnings ESP of +1.24% and a Zacks Rank #3.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>