We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Symantec (SYMC) to Report Q1 Earnings: What's in Store?
Read MoreHide Full Article
Symantec Corp. is set to report first-quarter fiscal 2017 results on Aug 4. Last quarter, the company posted a negative earnings surprise of 15.79%. Let us see how things are shaping up for this announcement.
Factors to Consider
Symantec’s fourth-quarter fiscal 2016 results were weaker than expected. Year-over-year comparisons were unfavorable for both the top line and the bottom line as well. Revenues declined in mainly due to a shift in consumer buying preferences and unfavorable foreign exchange rates.
The scenario has not changed much this quarter either as changing customer spending behavior has been reflected in the quarterly results of several other players in this space. Over the past few quarters, it has been noted that companies in this space have been breaking their cybersecurity investment plans in phases and implementing the same over a longer duration of time, instead of making a single large investment.
As a result, we are concerned that 2016 spending may fall to 2014 levels. Notably, cybersecurity spending by these companies skyrocketed last year due to a series of high-profile security breaches.
Further, Symantec’s core Norton Anti-virus software business was hit hard by persistent weakness in PC sales. Other than intensifying competition, this business has been dealt a severe blow by growing usage of smartphones and tablets. This headwind could have a material impact on second-quarter results as well.
Moreover, continued investments to launch new and innovative products could impact margins in the near term. Besides competition from the likes of Intel and Microsoft, smaller companies like Kaspersky are consistently launching comparable and competitive products, which is a matter of concern.
Nonetheless, we are encouraged by the company’s efforts on streamlining operations and maximizing shareholder value. During the fourth quarter of fiscal 2016, the company closed the sale of the Veritas business for $7.4 billion to Carlyle Group (CG - Free Report) . We believe that the deal provided Symantec with much needed funds to continue expanding its product portfolio as well as its presence in the fast growing markets.
Our proven model does not conclusively show that Symantec will beat earnings 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. But that is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Symantec is 0.00%. This is because the Most Accurate estimate stands in line with the Zacks Consensus Estimate of 20 cents.
Zacks Rank: Symantec’s Zacks Rank #3, when combined with its 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are a couple of stocks that you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Qualys Inc. (QLYS - Free Report) , with an Earnings ESP of +12.50% and a Zacks Rank #3.
CenturyLink Inc. , with an Earnings ESP of +1.70% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Symantec (SYMC) to Report Q1 Earnings: What's in Store?
Symantec Corp. is set to report first-quarter fiscal 2017 results on Aug 4. Last quarter, the company posted a negative earnings surprise of 15.79%. Let us see how things are shaping up for this announcement.
Factors to Consider
Symantec’s fourth-quarter fiscal 2016 results were weaker than expected. Year-over-year comparisons were unfavorable for both the top line and the bottom line as well. Revenues declined in mainly due to a shift in consumer buying preferences and unfavorable foreign exchange rates.
The scenario has not changed much this quarter either as changing customer spending behavior has been reflected in the quarterly results of several other players in this space. Over the past few quarters, it has been noted that companies in this space have been breaking their cybersecurity investment plans in phases and implementing the same over a longer duration of time, instead of making a single large investment.
As a result, we are concerned that 2016 spending may fall to 2014 levels. Notably, cybersecurity spending by these companies skyrocketed last year due to a series of high-profile security breaches.
Further, Symantec’s core Norton Anti-virus software business was hit hard by persistent weakness in PC sales. Other than intensifying competition, this business has been dealt a severe blow by growing usage of smartphones and tablets. This headwind could have a material impact on second-quarter results as well.
Moreover, continued investments to launch new and innovative products could impact margins in the near term. Besides competition from the likes of Intel and Microsoft, smaller companies like Kaspersky are consistently launching comparable and competitive products, which is a matter of concern.
Nonetheless, we are encouraged by the company’s efforts on streamlining operations and maximizing shareholder value. During the fourth quarter of fiscal 2016, the company closed the sale of the Veritas business for $7.4 billion to Carlyle Group (CG - Free Report) . We believe that the deal provided Symantec with much needed funds to continue expanding its product portfolio as well as its presence in the fast growing markets.
SYMANTEC CORP Price and EPS Surprise
SYMANTEC CORP Price and EPS Surprise | SYMANTEC CORP Quote
Earnings Whispers
Our proven model does not conclusively show that Symantec will beat earnings 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. But that is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Symantec is 0.00%. This is because the Most Accurate estimate stands in line with the Zacks Consensus Estimate of 20 cents.
Zacks Rank: Symantec’s Zacks Rank #3, when combined with its 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are a couple of stocks that you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Qualys Inc. (QLYS - Free Report) , with an Earnings ESP of +12.50% and a Zacks Rank #3.
CenturyLink Inc. , with an Earnings ESP of +1.70% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>