The earnings season is in its last leg, with over 84% of the total S&P 500 index members having released their quarterly results through Nov 4. Results have improved considerably from the previous quarters and are expected to end up in the positive territory after five consecutive quarters of earnings decline for the S&P 500 index.
Per our latest Earnings Preview report, combining the actual results from the 423 S&P 500 members with estimates from the soon-to-be-report 77 index members, overall Q3 earnings are expected to be up 3% on a 1.5% growth in revenues. The relative improvement in estimate revisions for the quarter is largely due to an improvement in the economy and rising oil prices.
Four of the 16 Zacks sectors are expected to witness an earnings decline in the quarter, with Oil/Energy, Transportation and Autos being the biggest drag. Over 645 companies are scheduled to report this week, including 31 S&P 500 members, bringing the tally for the results of the index’s total membership to 90.8%.
The outsourcing stocks belong to the business services sector, the performance of which is looking reasonably healthy this quarter. For the sector, earnings are expected to grow 16.7%, while sales are touted to rise 8.7% over the last year. The projected improvement is majorly driven by the growing momentum in the economy as a whole and the job market during the quarter.
Let’s see how things are shaping up for the two outsourcing companies scheduled to report their results tomorrow.
Broadridge Financial Solutions, Inc. (BR - Free Report) is set to report first-quarter fiscal 2017 results before the market opens. Last quarter, the company posted earnings of $1.45 per share, which was in line with the Zacks Consensus Estimate. Notably, Broadridge surpassed the Zacks Consensus Estimate thrice in the preceding four quarters. It has an average positive surprise of 13.94%.
Broadridge is a leading global provider of technology-based outsourcing solutions to the financial services industry. We believe Broadridge’s strategic initiatives such as acquisitions and product launch will continue to drive its top- and bottom-line results. Furthermore, strength in the company’s products and services, led by the Investor Communications business, allows it to brave the ongoing economic challenges. We believe that these positives, combined with new product initiatives, will enable the company to counter macro headwinds to a large extent. They will also provide Broadridge an opportunity to grow further as and when the financial services market improves.
We are uncertain of an earnings beat this quarter as the company has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Read More: (Broadridge to Report Q1 Earnings: What's in the Cards?)
Atento S.A.(ATTO - Free Report) is slated to report third-quarter 2016 results after market close tomorrow. The company is a provider of customer relationship management and business process outsourcing (CRM BPO) services in Latin America and Spain.
For the quarter to be reported, we are uncertain of an earnings beat as the company has an Earnings ESP of 0.00% and a Zacks Rank #3. Over the trailing four quarters the company beat estimates once by a large margin, with an average positive surprise of 20.65%.
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