The earnings season is well into the later stage of the reporting cycle with over 364 S&P 500 companies having already reported results as of Nov 2. The Q3 numbers of the hitherto declared companies in the benchmark index reveal that earnings are up 1.6% year over year on 1.6% growth in revenues, with 72.3% coming ahead of EPS estimates and 54.7% beating revenue expectations. The overall results have improved significantly from the preceding quarters and are likely to end up in the positive territory after five consecutive quarters of earnings decline for the benchmark index.
Per the latest Earnings Outlook report, combining the actual results from the 364 S&P 500 members with estimates from the yet-to-report 136 index members, overall Q3 earnings are expected to be up 2.4% on a 1.4% growth in revenues. The relative improvement in estimate revisions for the quarter is largely due to a turnaround in the economy and rising oil prices. Experts widely believe that growth is likely to ramp up in Q4 and beyond.
For Q3 as a whole, about four of the 16 Zacks sectors are expected to witness an earnings decline, with Oil/Energy, Transportation and Autos being the biggest drag.
Among the Business Services stocks slated to report their third-quarter 2016 numbers on Nov 7, let’s have a sneak peek at three major players to see how things are shaping up for the upcoming results.
First Data Corporation (FDC - Free Report) is scheduled to report its earnings before the opening bell. The company is well placed to benefit from its integrated offerings in the ecommerce industry through value-added products and services. However, for the impending quarter, we cannot conclusively predict an earnings beat as the company has an Earnings ESP of -3.70%, and Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sotheby's (BID - Free Report) is slated to report its earnings before the opening bell. The company operates as a global auctioneer of authenticated fine art, decorative art, jewelry, wine, and collectibles. Global auction sales indicate that the art market is experiencing a period of lower sales and the long-term growth trend in the market appears to be moderating in 2016. Sotheby’s has an Earnings ESP of 0.00% and carries a Zacks Rank #3. Over the last four quarters, the company beat estimates thrice, with an average negative surprise of 1.80%.
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Envestnet, Inc. (ENV - Free Report) is slated to report its earnings after the closing bell. The company is a leading provider of unified wealth management technology and services with open architecture platforms. Envestnet expects healthy growth on secular trends in the wealth management industry and the uniqueness and comprehensiveness of its product portfolio. Envestnet has an Earnings ESP of 0.00% and carries a Zacks Rank #3.
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