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DXC Technology (DXC) to Report Q2 Earnings: What's in Store?

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DXC Technology Company (DXC - Free Report) is set to release second-quarter fiscal 2021 results on Nov 5.

The Zacks Consensus Estimate for quarterly revenues is pinned at $4.49 billion, calling for a 7.5% year-over-year decline. The consensus mark for earnings is 38 cents per share, suggesting a 72.5% slump.

The company’s earnings outpaced estimates in three of the trailing four quarters and missed in the other, the average beat being 31.6%.

Let’s see how things have shaped up for the upcoming announcement.

Factors at Play

DXC’s fiscal second-quarter performance is likely to have been affected by the pandemic-induced business disruptions. Soft IT spending as organizations are pushing back their investments in big and expensive technology products, due to the global economic slowdown concerns amid the coronavirus crisis, might have hurt the company’s performance during the quarter to be reported.

Furthermore, the company’s top line is likely to reflect negative impact of price concessions, previous business terminations, and runoffs. However, during the fiscal first-quarter earnings call, management had stated that these headwinds would have lesser impact on its fiscal second-quarter results compared with the prior quarter.

Moreover, a weak traditional business is likely to have dampened the top line during the quarter under review.

Furthermore, increased investments in the business and higher interest expenses might have weighed on the company’s quarterly performance.

What Our Model Says

Our proven model does not predict an earnings beat for DXC this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

DXC carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of +1.06%, at present.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Sunoco LP (SUN - Free Report) has an Earnings ESP of +1.00% and sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hologic, Inc. (HOLX - Free Report) has an Earnings ESP of +20.90% and holds a Zacks Rank of 2, currently.

Marchex, Inc. (MCHX - Free Report) has an Earnings ESP of +16.67% and currently carries a Zacks Rank of 2.

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