Symantec Corporation (SYMC - Free Report) is set to report third-quarter fiscal 2014 results on Jan 29. Last quarter, the company posted a positive earnings surprise of 17.5%. Let us see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Symantec delivered mixed second-quarter 2014 results, with earnings per share surpassing the Zacks Consensus Estimate but revenues lagging the same. We believe that improvement in authentication and managed security services (MSS) businesses and an increase in NetBackup appliances are positives for the company. Moreover, Symantec’s restructuring initiatives and share buyback plans are expected to support the company’s bottom line.
Nonetheless, the uncertainty over PC sales, competition from Intel Corp. (INTC - Free Report) and Microsoft (MSFT - Free Report) as well as the prevailing macro-economic sluggishness remain headwinds.
Our proven model does not conclusively show that Symantec will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 39 cents. Hence, the difference is 0.00%.
Zacks Rank: Symantec’s Zacks Rank #3 (Hold), when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here is another company you may want to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter:
Baidu, Inc. (BIDU - Free Report) , Earnings ESP of +7.09% and a Zacks Rank #1 (Strong Buy)