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Is First Data Corporation (FDC) Likely to Beat Q4 Earnings?

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We expect First Data Corporation (FDC - Free Report) to beat expectations when it reports fourth-quarter 2015 results on Feb 9.

Why a Likely Positive Surprise?

Our proven model shows that First Data is likely to beat earnings estimates because it has the right combination of two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +5.26%. This is very meaningful and a leading indicator of a likely earnings surprise.

Zacks Rank: First Datasports a Zacks Rank #1 (Strong Buy).Note that stocks with a Zacks Rank #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating the estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement. 

The combination of First Data’s Zacks Rank #1 and +5.26% ESP makes us very confident in looking for an earnings beat.

What is Driving the Better-than-Expected Earnings?

First Data Corporation is a commerce-enabling technology and solutions company. It offers merchant transaction processing and acquiring; credit, retail and debit card issuing and processing; prepaid services and check verification, settlement and guarantee services.

Even though the stock is trading below the offer price of $16, analysts consider it promising. Over the last 30 days, the estimates for the current quarter rose 11.8% while that for 2016 moved almost 4% up. Additionally, the company holds a Zacks Style Score of “A”.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 19 cents.

Other Stocks to Consider

First Data is not the only firm looking up this earnings season. We also see likely earnings beats from these three stocks:

Escalade Inc. (ESCA - Free Report) , with an Earnings ESP of +18.18% and a Zacks Rank #2.

The Walt Disney Company (DIS - Free Report) , with an Earnings ESP of +2.08% and a Zacks Rank #3.

Time Warner Inc. , with an Earnings ESP of +2.00% and a Zacks Rank #2.

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