service sector has seen steadily recovering from the pandemic blues through the fourth quarter of 2020, thanks to the improving economy and resumption of business activities that helped expand manufacturing and non-manufacturing activities. Nonetheless, it is still significantly weak when compared with the pre-pandemic level.
During the fourth quarter, while growth in services pertaining to transportation, warehousing, retail, wholesale, professional, technical, information, finance, education and health care aided the sector, spaces like accommodation, food services, entertainment, recreation, rental and leasing continued to struggle with depressed demand.
Q4 Earnings Picture So Far, and Expectations
Halfway through the fourth quarter, the latest
Earnings Outlook suggests that earnings for those S&P 500 members of the business services sector, that have reported results, have slipped 4.5% year over year on 0.7% revenue growth.
Major players such as
Robert Half International ( RHI Quick Quote RHI - Free Report) , ManpowerGroup ( MAN Quick Quote MAN - Free Report) and Aptiv ( APTV Quick Quote APTV - Free Report) have delivered stellar top- and bottom-line numbers.
Total quarterly earnings for the S&P 500 members of the sector are currently anticipated to display a 2.9% year-on-year drop, while revenues are estimated to reflect a 2.5% fall. This compares with the 3.6% and 3.9% decline in earnings and revenues in the third quarter of 2020, respectively.
Sneak Peek into Upcoming Earnings Releases
Here we discuss four business services companies, scheduled to report their fourth-quarter 2020 results on Feb 9.
Our quantitative model suggests that a company needs the right combination of the two key ingredients — a positive
Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of a positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Gartner ( IT Quick Quote IT - Free Report) : This Connecticut-based research and advisory company’s Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.07 billion, indicating a decline of 10.9% from the year-ago quarter's reported figure. The consensus estimate for earnings stands at 82 cents, suggesting a year-over-year plunge of 30.5%.
Gartner has an Earnings ESP of -6.86% and carries a Zacks Rank #2 (Buy). (Read more:
) Gartner to Report Q4 Earnings: What's in the Cards? Gartner, Inc. Price and EPS Surprise Fiserv ( FISV Quick Quote FISV - Free Report) : This Wisconsin-based financial services technology provider has an Earnings ESP of -2.22% and carries a Zacks Rank of 3, at present.
The Zacks Consensus Estimate for quarterly revenues is pinned at $3.75 billion, calling for a year-over-year decline of 7.3%. The consensus mark for earnings is pegged at $1.29, indicating year-over-year growth of 14.2%. (Read more:
) Fiserv ( FISV Quick Quote FISV - Free Report) to Report Q4 Earnings: What's in the Cards? Fiserv, Inc. Price and EPS Surprise S&P Global ( SPGI Quick Quote SPGI - Free Report) : This New York-based ratings, benchmarks, analytics, and data provider has an Earnings ESP of +3.28% and currently carries a Zacks Rank of 3.
The Zacks Consensus Estimate for earnings is $2.55, suggesting marginal growth of 0.8% from the year-ago period reported figure. The consensus estimate for revenues is pinned at $1.75 billion, indicating 1.1% year-over-year growth. (Read more
: ) Is a Beat in the Cards for S&P Global in Q4 Earnings? S&P Global Inc. Price and EPS Surprise Fidelity National Information Services ( FIS Quick Quote FIS - Free Report) : This Florida-based financial services Technology Company’s Zacks Consensus Estimate for earnings is pegged at $1.56, calling for a year-over-year decline of 0.6%. The consensus mark for revenues stands at $3.33 billion, suggesting a year-over-year decline of 0.3%.
Fidelity National has an Earnings ESP of -0.08% and holds a Zacks Rank #4 (Sell), at present.
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