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What's in Store for First Data (FDC) this Earnings Season?

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First Data Corporation (FDC - Free Report) , a leading provider of electronic commerce solutions, is set to report third-quarter 2016 results on Nov 7. Last quarter, the company posted a positive surprise of 3.57%.

Let’s see how things are shaping up for this announcement.

Factors at Play

SMB turnaround: First Data is focusing on its SMB turnaround plan and had started seeing initial signs of progress in the second quarter. The turnaround will significantly boost the company’s North American merchant business.

Enterprise business: The company differentiates itself in this space by consistently offering new features and solutions to existing clients while making continuous effort to expand client list.

Partnerships: Strategic partnership is the most important part of First Data’s growth program. In the second quarter, the company partnered with Bypass and Bancolombia. It is also at different stages of completing partnerships with First Tennessee, BBVA, Zions Bank and Silicon Valley Bank.

Key Metrics: With growth initiatives going as per plan, the company is strengthening its balance sheet, expanding margins and improving cash generation capacity. Continued focus on innovation and strategic investments are expected to drive growth.

FIRST DATA CORP Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that First Data will beat estimates 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. That is not the case here as you will see below.

Zacks ESP: The Most Accurate estimate is pegged at 26 cents while the Zacks Consensus Estimate stands at 27 cents. Hence, the difference is -3.70%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank:  First Data’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks That Warrant a Look

Here are some stocks that you may want to consider as our model shows these have the right combination of elements to post a positive earnings surprise:

SITO Mobile, Ltd. (SITO - Free Report) , with an Earnings ESP of +100.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stratasys Ltd. (SSYS - Free Report) , with an Earnings ESP of +41.67% and a Zacks Rank #1.

Methanex Corporation (MEOH - Free Report) with an Earnings ESP of +600.0% and a Zacks Rank #3

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