The Q3 earnings season is now in its tail end and we have a clear picture with results from 476 S&P 500 companies (95.2% of the index’s total membership) on board.
Approximately 73.1% posted positive earnings surprises, while 55.5% surpassed top-line expectations. According to the latest Earnings Preview, earnings of these companies are up 4.0% 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 476 index members, with estimates from the still-to-come 24 companies, will improve 3.6% from the year-ago period, while total revenue will grow 1.5%.
Let’s see what’s in store for three technology stocks, which are expected to release quarterly numbers on Nov 22.
Hewlett Packard Enterprise Company (HPE - Free Report) offers commercial tech products. It will complete its one year of operation following the split from its parent Hewlett-Packard Company at the end of the fourth quarter.
The company is unlikely to beat fourth-quarter fiscal 2016 earnings estimates as it has a Zacks Rank #3 (Hold) 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 to beat estimates. Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Notably, Hewlett Packard’s results compared favorably with the Zacks Consensus Estimate in the last three quarters, with an average positive surprise of 4.67%. Last quarter, the company posted an 8.89% positive surprise. (Read more: Hewlett Packard Enterprise Q4 Earnings: What's Up?)
Similarly, we don’t expect HP Inc. (HPQ - Free Report) , a supplier of PC’s and printers, to post an earnings beat for fourth-quarter fiscal 2016 as it has an Earnings ESP of 0.00% and a Zacks Rank #3.
HP Inc’s results compared favorably with the Zacks Consensus Estimate in three out of the last four quarters, with the average positive earnings surprise being 2.17%. In the last reported quarter, the company posted a 6.67% positive surprise, mainly driven by strength in Personal System, outperformance of newly launched products, and execution of restructuring actions and productivity initiatives. However, the persistent decline in PC shipments remains a material headwind to the company. Also, macroeconomic challenges and tepid IT spending remain near-term concerns. (Read more: What's in the Cards for HP Inc. in Q4 Earnings?)
Also, we don’t expect Mentor Graphics Corp. to post an earnings beat for third-quarter fiscal 2017 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.
Mentor Graphics’ results compared favorably with the Zacks Consensus Estimate in three out of the last four quarters, with the average positive earnings surprise being 68.86%. Notably, the company posted a 200.0% positive surprise in the last reported quarter.
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