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F5 Networks (FFIV) to Post Q2 Earnings: What's in Store?

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F5 Networks (FFIV - Free Report) is scheduled to report second-quarter fiscal 2022 results on Apr 26.

For the fiscal second quarter, F5 Networks estimates revenues in the range of $610-$650 million ($630 million at the midpoint). The Zacks Consensus Estimate for revenues is pegged at $633.6 million, suggesting a year-over-year decline of 1.8%.

The company anticipates non-GAAP earnings in the range of $1.75-$2.15 per share ($1.95 at the midpoint). The Zacks Consensus Estimate stands at $2.01 per share, indicating a year-over-year decrease of approximately 19.6%.

The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 7.2%.

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

F5, Inc. Price and EPS Surprise F5, Inc. Price and EPS Surprise

F5, Inc. price-eps-surprise | F5, Inc. Quote

Factors at Play

F5 Networks’ fiscal second-quarter performance is likely to have benefited from the pandemic-induced work-from-home and online-learning wave, which is boosting demand for secured communication networks.

The company’s sustained focus on transitioning the business to a software-driven model is anticipated to have aided the company’s overall performance in the fiscal second quarter. The surging demand for multi-cloud application services is expected to have been a key growth driver during the quarter.

Moreover, the rising traction of the Enterprise License Agreement and annual subscriptions by customers is likely to have boosted software growth. F5 Networks expects revenues from the Software segment to increase in the 35%-40% range during the quarter under review.

Additionally, FFIV and NGINX’s (pronounced as engine x) first combined solution — Controller 3.0 — is expected to have boosted the total addressable market and deal sizes across the DevOps and Super-NetOps customer profiles. This is estimated to have positively impacted the company’s overall performance during the fiscal second quarter.

However, the ongoing industry-wide supply-chain constraints for components are likely to have negatively impacted F5 Networks’ systems sales during the second quarter. The company forecasts that the recent supply-chain constraints can lead to a $60 million-$80 million shortfall in its ability to ship in the second quarter.

This, in turn, is anticipated to have more than offset the benefits of growth projection for the software business, thereby leading to a decline in overall Product segment revenues. The Zacks Consensus Estimate for product revenues stands at $292 million, indicating a decline of 5.5% from the year-ago reported figure of $309 million.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for F5 Networks this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

F5 Networks currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, Apple (AAPL - Free Report) , Qualcomm (QCOM - Free Report) and Fortive (FTV - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

Apple is slated to report second-quarter fiscal 2022 results on Apr 28. The company carries a Zacks Rank #2 and has an Earnings ESP of +1.78% at present. Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.43 per share, suggesting a year-over-year improvement of 2.1%. AAPL’s quarterly revenues are estimated to increase 5.4% year over year to $94.4 billion.

Qualcomm carries a Zacks Rank #3 and has an Earnings ESP of +0.15%. The company is scheduled to report second-quarter fiscal 2022 results on Apr 27. Qualcomm’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 12.2%.

The Zacks Consensus Estimate for QCOM’s second-quarter earnings is pegged at $2.91 per share, indicating a year-over-year decline of 53.2%. The consensus mark for revenues stands at $10.58 billion, suggesting a year-over-year increase of 33.3%.

Fortive currently carries a Zacks Rank #3 and has an Earnings ESP of +0.30%. The company is slated to report its first-quarter 2022 results on Apr 28. Fortive’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 4%.

The Zacks Consensus Estimate for Fortive’s first-quarter earnings stands at 68 cents per share, implying a year-over-year increase of 7.9%. FTV is estimated to report revenues of $1.35 billion, which suggests growth of 7.1% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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