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ScanSource (SCSC) to Post Q1 Earnings: What's in the Cards?

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ScanSource, Inc. (SCSC - Free Report) is scheduled to report first-quarter fiscal 2022 results on Nov 9, after the closing bell.

Q1 Estimates

The Zacks Consensus Estimate for the fiscal first-quarter revenues is pegged at $802 million, indicating growth of 2.5% from the prior-year quarter. The consensus mark for quarterly earnings currently stands at 75 cents, suggesting an improvement of 78.6% from the year-ago quarter. The estimates have remained unchanged over the past 30 days.

Q4 Performance

ScanSource’s fourth-quarter fiscal 2021 earnings and revenues improved year over year and beat the respective Zacks Consensus Estimate. The company has a trailing four-quarter earnings surprise of 27.9%, on average.

ScanSource, Inc. Price and EPS Surprise ScanSource, Inc. Price and EPS Surprise

ScanSource, Inc. price-eps-surprise | ScanSource, Inc. Quote

Key Factors to Note

ScanSource’s sales have been benefiting from broad-based growth across its technologies in both operating segments across all geographies. The Worldwide Barcode, Networking & Security segment comprises sales to technology customers in North America and Brazil. It has been witnessing growth across key technologies in both the regions, and areas including mobile computing, self-checkout, video surveillance, and networking. These factors along with higher customer count might get reflected in the to-be-reported quarter’s top line. The Zacks Consensus Estimate for the segment’s sales for the to-be-reported quarter is currently pegged at $550 million, suggesting year-over-year growth of 5%.

The Worldwide Communications & Services segment consists of sales to technology customers in North America, Brazil, Europe and the U.K. Sales growth in the North America business has particularly been strong. The segment is gaining on growth in cloud enabled endpoints, accelerated by the shift to cloud. Net sales for its master agency business, Intelisys, has been robust, growing 13% year over year in the last reported quarter — marking the 20th consecutive quarter of double-digit growth. In fiscal 2021, Intelisys net billings, which are amounts billed by suppliers to end users and represent annual recurring revenue (“ARR”), totaled approximately $2 billion. Backed by this momentum, the segment is likely to witness top-line growth in the fiscal first quarter as well. The Zacks Consensus Estimate for the segment’s sales stands at $253 million, indicating an improvement of 8% from $234 million in the last-year quarter.

In July 2020, the company embarked on a $30 million annualized expense reduction program to address the business impacts of the COVID-19 pandemic and prepare for the next phase of growth. This is likely to have contributed to margins in the to-be-reported quarter. Although supply chain headwinds are likely to have impacted the company’s performance in the quarter, strong end-markets, expected benefits from its cost reduction program and efforts to improve operational performance may have offset the same.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for ScanSource this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds 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.

Earnings ESP: The Earnings ESP for ScanSource is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

Zacks Investment ResearchImage Source: Zacks Investment Research

Over the past year, shares of ScanSource have gained 80.7% against the industry’s decline of 15.7%.

Stocks Poised to Beat Earnings Estimates

Here are some stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Tetra Tech, Inc. (TTEK - Free Report) has a Zacks Rank #2 and an Earnings ESP of +0.50%, at present.

Johnson Controls International plc (JCI - Free Report) has an Earnings ESP of +0.16% and a Zacks Rank of 2, currently.

Deere & Company (DE - Free Report) , a Zacks #2 Ranked stock, has an Earnings ESP of +5.55%.