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Dun & Bradstreet (DNB) Q2 Earnings: Likely to Disappoint?

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Dun & Bradstreet (DNB - Free Report) is slated to release second-quarter 2017 results on Aug 2 after the closing bell. Last quarter, the company posted a positive earnings surprise of 6.74%. Moreover, it has delivered positive earnings surprises in three of the trailing four quarters, resulting in an average positive earnings surprise of 6.04%.

Furthermore, the company reported decent first-quarter 2017 results wherein revenues of $381.5 million easily beat the Zacks Consensus Estimate of $378.4 million. Also, on a year-over-year basis, both the top line and the bottom line registered modest growth.

However, we note that Dun & Bradstreet shares have declined 9.1% year to date against the industry’s gain of 22.3%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Dun & Bradstreet continues to hold a dominant position in risk management, credit ratings, sales and marketing, e-business as well as supply-management solutions. We believe that the company is expected to benefit from its high-margin business model and innovative product pipeline. Additionally, partnerships with big players have also aided it to bring many more customers into the fold.

Even though the company’s Americas business remains strong, the international business continues to be a drag on financials. Stiff competition, weak DNBi business and high debt are other areas of concerns. Plus, increasing competition from companies such as FactSet Research Systems Inc. and Nielsen N.V. and a high debt level remain major concerns.

Earnings Whispers

Our proven model does not conclusively show that Dun & Bradstreet is likely to 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. This is not the case here as you will see below:

Zacks ESP: Dun & Bradstreet currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.16 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Dun & Bradstreet carries a Zacks Rank #4 (Sell).

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:

Kemet Corp. (KEM - Free Report) with an Earnings ESP of +11.11% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank Stocks here.

Vishay Intertechnology, Inc. (VSH - Free Report) with an Earnings ESP of +6.06% and a Zacks Rank #1.

CGI Group, Inc. (GIB - Free Report) with an Earnings ESP of +4.23% and a Zacks Rank #2.

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