We are in the thick of the second-quarter earnings season, with as many as 1000 companies, including 116 S&P 500 members, scheduled to post their financial numbers this week. By the end of next week, we will have seen Q2 results from more than 87% of the index members.

Results till now have shown a modest improvement from the extremely weak levels over the last couple of quarters. However, growth is still non-existent, with Q2 likely to be the 5th quarter in a row of earnings declines for the S&P 500 index.

As of Friday, Jul 29, we saw Q2 results from 317 S&P 500 members that together account for 73.5% of the index’s total market capitalization. Total earnings for these members are down 3.3% from the same period last year on 0.9% lower revenues, with 72.9% beating EPS estimates and 53.6% coming ahead of top-line expectations.

Coming to the technology sector, we now have results from 84.6% of the sector’s total market cap in the index. The results here so far have been notably better than expected. Total earnings in this sector are down 0.9% from the same period last year on 2.1% higher revenues, with 83.3% beating EPS estimates and 77.8% surpassing revenue expectations. (Read more: Q2 Earnings Trends Already Established)

We believe Software will remain attractive because it is hard to commoditize Technology and easy to patent. Moreover, it is the foundation for the ongoing revolution in computing, security, networking and ecommerce among other things, keeping investors’ interest in the sector alive.

Among the companies slated to come up with second-quarter results this week, let’s see what’s in store for these five major Software stocks. Each is scheduled to report on Tuesday, Aug 2.

Callidus Software Inc.

Last quarter, Callidus Software recorded a negative earnings surprise of 20.0%. However, Callidus Software outperformed the Zacks Consensus Estimate once in each of the last four quarters, with an average positive surprise of 11.67%.

Notably, our proven model does not conclusively show that Callidus Software is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below:

For the second quarter, Callidus Software has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 8 cents. Meanwhile, the company has a Zacks Rank #3, which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.

CALLIDUS SOFTWR Price and EPS Surprise

CALLIDUS SOFTWR Price and EPS Surprise | CALLIDUS SOFTWR Quote

Guidance Software, Inc.

Last quarter, Guidance Software recorded a positive earnings surprise of 14.29%. Also, the company outperformed the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 15.93%.

For the upcoming second quarter, Guidance Software has an Earnings ESP of +0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of 17 cents. It currently carries a Zacks Rank #3. So, we can’t say whether the company will beat estimates this time around.

GUIDANCE SOFTWR Price and EPS Surprise

GUIDANCE SOFTWR Price and EPS Surprise | GUIDANCE SOFTWR Quote

Tableau Software, Inc.

Tableau Software recorded a negative earnings surprise of 35.56% last quarter. In fact, the company missed the Zacks Consensus Estimate in each of the last four quarters, with an average negative surprise of 190.12%.

For the second quarter, Tableau Software has an Earnings ESP of -2.70%. This is because the Most Accurate estimate stands at a loss of 38 cents and the Zacks Consensus Estimate stands at a loss of 37 cents. It currently carries a Zacks Rank #3. So, we can’t say whether the company will beat estimates this time around. (Read more: What's in Store for Tableau Software in Q2 Earnings?)

TABLEAU SOFTWAR Price and EPS Surprise

TABLEAU SOFTWAR Price and EPS Surprise | TABLEAU SOFTWAR Quote

Paycom Software, Inc. (PAYC Quick QuotePAYC - Free Report)

Paycom Software recorded a positive earnings surprise of 55.00% last quarter. In fact, the company outperformed the Zacks Consensus Estimate in each of the last four quarters, with an average positive surprise of 33.54%.

Notably, our proven model shows that Paycom Software is likely to beat the Zacks Consensus Estimate as it has the right combination of a positive Earnings ESP and a favorable Zacks Rank.

The Earnings ESP for Paycom Software is +7.69%. This is because the Most Accurate estimate stands at 14 cents while the Zacks Consensus Estimate is pegged at 13 cents. Meanwhile, the company has a Zacks Rank #3, which increases the predictive power of ESP. Therefore, we are reasonably confident in looking for an earnings beat.

PAYCOM SOFTWARE Price and EPS Surprise

PAYCOM SOFTWARE Price and EPS Surprise | PAYCOM SOFTWARE Quote

PROS Holdings, Inc. (PRO Quick QuotePRO - Free Report)

PROS Holdings, Inc. posted a positive earnings surprise of 4.26% last quarter. Notably, the company outperformed the Zacks Consensus Estimate thrice in the last four quarters, with an average positive surprise of 4.22%.

For the second quarter, PROS Holdings has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of 44 cents. The company has a Zacks Rank #3, which increases the predictive power of ESP. However, a 0.00% ESP makes surprise prediction difficult.

PROS HOLDINGS Price and EPS Surprise

PROS HOLDINGS Price and EPS Surprise | PROS HOLDINGS Quote

Stay tuned! Check back on our full write-up on earnings releases of these stocks.

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