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Symantec (SYMC) to Report Q3 Earnings: What Lies in Store?
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Symantec Corp. is set to report third-quarter fiscal 2017 results on Feb 1. Last quarter, the company’s earnings were in-line with the Zacks Consensus Estimate. Notably, the stock has surpassed the Zacks Consensus Estimate twice while matching the same once and missing on it once in the trailing four quarters. It has an average positive earnings surprise of 5.36%.
Let us see how things are shaping up for this announcement.
Factors to Consider
Symantec’s earnings and revenues have been under pressure due to persistent weakness in PC sales, which particularly hurt its core Norton anti-virus software business. Apart from this, intensifying competition from Palo Alto Networks, FireEye Inc. and Check Point Software has also been eroding its market share in the enterprise segment.
As a result, the company has been singularly focused on restructuring its business. In early 2016, Symantec closed the sale of the Veritas business to Carlyle Group for $7.4 billion. Symantec also completed the acquisition of Blue Coat, which has enabled it to reduce dependence on the PC market and strengthen its position in the enterprise security space. Revenues from the enterprise security segment are now expected to contribute 62% to the company’s top line.
These restructuring initiatives will positively impact results in the third quarter too, continuing the trend of the first half of fiscal 2017.
Nonetheless, continued investments to launch new and innovative products could impact margins in the soon-to-be reported quarter. Also, competition from major players like Microsoft (MSFT - Free Report) and smaller companies like Kaspersky, which are consistently launching comparable and competitive products, poses a concern.
Earnings Whispers
Our proven model does not conclusively show that Symantec will beat earnings 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. But that is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Symantec is 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 21 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Symantec carries 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.
Twilio Inc. (TWLO - Free Report) , with an Earnings ESP of +8.33% and a Zacks Rank #3.
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Symantec (SYMC) to Report Q3 Earnings: What Lies in Store?
Symantec Corp. is set to report third-quarter fiscal 2017 results on Feb 1. Last quarter, the company’s earnings were in-line with the Zacks Consensus Estimate. Notably, the stock has surpassed the Zacks Consensus Estimate twice while matching the same once and missing on it once in the trailing four quarters. It has an average positive earnings surprise of 5.36%.
Let us see how things are shaping up for this announcement.
Factors to Consider
Symantec’s earnings and revenues have been under pressure due to persistent weakness in PC sales, which particularly hurt its core Norton anti-virus software business. Apart from this, intensifying competition from Palo Alto Networks, FireEye Inc. and Check Point Software has also been eroding its market share in the enterprise segment.
As a result, the company has been singularly focused on restructuring its business. In early 2016, Symantec closed the sale of the Veritas business to Carlyle Group for $7.4 billion. Symantec also completed the acquisition of Blue Coat, which has enabled it to reduce dependence on the PC market and strengthen its position in the enterprise security space. Revenues from the enterprise security segment are now expected to contribute 62% to the company’s top line.
These restructuring initiatives will positively impact results in the third quarter too, continuing the trend of the first half of fiscal 2017.
Nonetheless, continued investments to launch new and innovative products could impact margins in the soon-to-be reported quarter. Also, competition from major players like Microsoft (MSFT - Free Report) and smaller companies like Kaspersky, which are consistently launching comparable and competitive products, poses a concern.
Earnings Whispers
Our proven model does not conclusively show that Symantec will beat earnings 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. But that is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Symantec is 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 21 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Symantec carries 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.
Symantec Corporation Price and EPS Surprise
Symantec Corporation Price and EPS Surprise | Symantec Corporation Quote
Stocks to Consider
Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
CEVA Inc. (CEVA - Free Report) , with an Earnings ESP of +9.52% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Twilio Inc. (TWLO - Free Report) , with an Earnings ESP of +8.33% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>