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Buyout & Sale Strategies to Drive CA Inc's (CA) Q2 Earnings
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CA, Inc. (CA - Free Report) is slated to release second-quarter fiscal 2018 results on Oct 25. The question lingering in investors’ minds is whether this IT management software company will be able to post a positive earnings surprise in to-be-reported quarter. Notably, CA has delivered positive earnings surprises for seven straight quarters. Over the trailing four quarters, the company delivered an average positive surprise of 7.6%. So, let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is pegged at 62 cents. We note that the Zacks Consensus Estimate remained nearly unchanged over the past 60 days. Additionally, analysts polled by Zacks project revenues of roughly $1.05 billion, up slightly 3.2% from the year-ago quarter.
Factors at Play
We expect CA’s acquisition and go-to-market sales strategies to drive the fiscal second-quarter top-line performance.
Let’s discuss the aforementioned factors one by one.
Acquisitions have been one of the key strategies of CA to enhance its IT management, software and services portfolio. The company in 2017 so far has completed the acquisition of Automic Holding GmbH and Veracode. These acquisitions have strengthened its position in virtualization, automation, assurance in the cloud computing environment. These are some of the broad-based acquisition strategies adopted by the company in the recent past. We believe the diversity of its products and the increased efficiency offered by such buyouts will attract customers across sectors, lending stability to its business model.
Furthermore, CA has 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 lower costs, consequently improving the bottom line.
Apart from pursuing growth through acquisitions, the company is leveraging cloud computing in a bid to enable organizations to source the best components — internal, external, private cloud, public cloud, mobile and more — to construct the most competitive business applications without wasting much time and resource.
Further, the company is focused on providing advanced management and security software required by organizations to take complete advantage of this evolution.
On the other hand, heightening competition from Oracle (ORCL - Free Report) , International Business Machines and HP Inc., as well as exposure to Europe remain near-term headwinds.
What the Zacks Model Unveils?
Our proven model does not conclusively show that CA 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 at least 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CA currently carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company has an Earnings ESP of 0.00%, as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 62 cents. The combination of CA's Zacks Rank #3 and Earnings ESP of 0.00% makes surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Texas Instruments Incorporated (TXN - Free Report) has an Earnings ESP of +0.07% and a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Buyout & Sale Strategies to Drive CA Inc's (CA) Q2 Earnings
CA, Inc. (CA - Free Report) is slated to release second-quarter fiscal 2018 results on Oct 25. The question lingering in investors’ minds is whether this IT management software company will be able to post a positive earnings surprise in to-be-reported quarter. Notably, CA has delivered positive earnings surprises for seven straight quarters. Over the trailing four quarters, the company delivered an average positive surprise of 7.6%. So, let’s see how things are shaping up prior to this announcement.
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is pegged at 62 cents. We note that the Zacks Consensus Estimate remained nearly unchanged over the past 60 days. Additionally, analysts polled by Zacks project revenues of roughly $1.05 billion, up slightly 3.2% from the year-ago quarter.
Factors at Play
We expect CA’s acquisition and go-to-market sales strategies to drive the fiscal second-quarter top-line performance.
Let’s discuss the aforementioned factors one by one.
Acquisitions have been one of the key strategies of CA to enhance its IT management, software and services portfolio. The company in 2017 so far has completed the acquisition of Automic Holding GmbH and Veracode. These acquisitions have strengthened its position in virtualization, automation, assurance in the cloud computing environment. These are some of the broad-based acquisition strategies adopted by the company in the recent past. We believe the diversity of its products and the increased efficiency offered by such buyouts will attract customers across sectors, lending stability to its business model.
Furthermore, CA has 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 lower costs, consequently improving the bottom line.
CA Inc. Price and EPS Surprise
CA Inc. Price and EPS Surprise | CA Inc. Quote
Apart from pursuing growth through acquisitions, the company is leveraging cloud computing in a bid to enable organizations to source the best components — internal, external, private cloud, public cloud, mobile and more — to construct the most competitive business applications without wasting much time and resource.
Further, the company is focused on providing advanced management and security software required by organizations to take complete advantage of this evolution.
On the other hand, heightening competition from Oracle (ORCL - Free Report) , International Business Machines and HP Inc., as well as exposure to Europe remain near-term headwinds.
What the Zacks Model Unveils?
Our proven model does not conclusively show that CA 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 at least 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CA currently carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company has an Earnings ESP of 0.00%, as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 62 cents. The combination of CA's Zacks Rank #3 and Earnings ESP of 0.00% makes surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Avnet, Inc. (AVT - Free Report) has an Earnings ESP of +2.24% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Texas Instruments Incorporated (TXN - Free Report) has an Earnings ESP of +0.07% and a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>