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Fidelity National (FIS) to Post Q4 Earnings: What's in Store?

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Fidelity National Information Services (FIS - Free Report) is scheduled to release fourth-quarter 2018 earnings on Feb 12, before the opening bell. While the company’s earnings are expected to reflect year-over-year growth, revenues may have witnessed a decline.

Notably, Fidelity delivered positive earnings surprises in each of the trailing four quarters, with average beat of 2.78%.

In the last reported quarter, the company pulled off a positive earnings surprise of 2.3%. Results benefited from lower expenses and expansion of net interest margin. However, decline in revenues and huge outstanding debt remained headwinds.
 

Factors to Influence Q4 Results

Fidelity’s revenue growth performance for the Oct-Dec quarter is unlikely to be impressive due to stiff competition in the industry. Per the consensus estimate, revenues from Integrated Financial Solutions are expected to decline 6.7% year over year to $1.12 billion and Global Financial Solutions revenues are likely to edge around 1% to $1.04 billion. Also, the overall top line of $2.21 billion is projected to be down 5.1% from the prior-year quarter.

The Florida-based financial service provider’s bottom line might benefit slightly from lower tax rates and rising interest-rate environment.

The company’s focus on introducing fresh and innovative products in order to meet the rising demand of customers may escalate expenses.

Fidelity’s shares have lost around 4.3% in the three-month period ended Dec 31, 2018, compared with the industry’s decline of 14.9%.

Will the upcoming earnings release give a boost to Fidelity’s stock? That depends largely on whether or not the firm is able to impress the market with its third-quarter results.

Here is what our quantitative model predicts:

Fidelity does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

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

Earnings ESP: The Earnings ESP is currently pegged at 0.00%.

Zacks Rank: Fidelity carries a Zacks Rank #4, which decreases the predictive power of ESP.

It should be noted that 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.

Notably, for the fourth quarter, the Zacks Consensus Estimate for earnings indicates 16.2% growth on a year-over-year basis.

Stocks That Warrant a Look

Here are some other stocks you may want to consider, as according to our model, these have the right combination of elements to post an earnings beat this quarter.

Bank Of Montreal (BMO - Free Report) is expected to release results on Feb 26. The company has an Earnings ESP of +0.30% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ares Capital Corporation (ARCC - Free Report) is scheduled to report earnings on Feb 12. It has an Earnings ESP of +1.10% and carries a Zacks Rank #3.

Garrison Capital Inc. has an Earnings ESP of +11.94% and has a Zacks Rank #2. It is set to release quarterly numbers on Mar 5.

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