The Q3 earnings season is now in its tail end and we have a clear picture with results from 470 S&P 500 companies (94% of the index’s total membership) on board.
Approximately 73.2% posted positive earnings surprises, while 55.3% surpassed top-line expectations. According to the latest Earnings Preview, earnings of these companies are up 3.8% from the same period last year, while revenues have increased 2.6%.
The third-quarter reporting cycle shows a positive earnings picture after five straight quarters of decline. The report projects that earnings for the total 470 index members with estimates from the still-to-come 30 companies, will improve 3.5% from the year-ago period, while total revenue will grow 1.5%.
Let’s see what’s in store for two electronic stocks, which are expected to release quarterly numbers early next week.
Cubic Corporation (CUB - Free Report) is the parent company of two major business segments – defense and transportation. The Cubic Defense Applications group is a world leader in realistic combat training systems, mission support services and defense electronics. Cubic Transportation Systems designs and manufactures automatic fare collection systems for public transit authorities.
The company is unlikely to beat fourth-quarter fiscal 2016 earnings estimates as it has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
As per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. Conversely, we caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Notably, Cubic Corporation’s results compared unfavorably with the Zacks Consensus Estimate in the last four quarters, with an average negative surprise of 55.31%. Last quarter, the company posted a 73.44% negative surprise.
Similarly, we don’t expect Daktronics Inc. (DAKT - Free Report) , a supplier of electronic scoreboards, computer-programmable displays, and large screen video displays and control systems, to post an earnings beat for second-quarter fiscal 2017 on Nov 22 as it has an Earnings ESP of 0.00% and a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here.
Daktronics’ results compared unfavorably with the Zacks Consensus Estimate in the last four quarters, with the average negative earnings surprise being 98.13%.
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