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Symantec (SYMC) to Post Q4 Earnings: Will it Miss Estimates?
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Symantec Corp. is set to report fourth-quarter fiscal 2017 results on May 10. Last quarter, the company posted a positive earnings surprise of 4.76%. Notably, over the trailing four quarters, the company beat estimates in two occasions, met in another and missed in the other, generating an average positive earnings surprise of 0.99%.
Let us see how things are shaping up for this announcement.
Factors to Consider
Symantec’s earnings and revenues have been under pressure due to persistent weakness in PC sales, which particularly hurt its core Norton anti-virus software business. Apart from this, intensifying competition from Palo Alto Networks, FireEye Inc. and Check Point Software has also been eroding the company’s market share in the enterprise segment.
As a result, the company has been solely focused on restructuring its business. In early 2016, Symantec closed the sale of the Veritas business to Carlyle Group for $7.4 billion. Symantec also completed the acquisition of Blue Coat, which enabled it to reduce dependence on the PC market and strengthen its position in the enterprise security space. Revenues from the enterprise security segment are now anticipated to contribute 62% to the company’s top line.
These restructuring initiatives will positively impact results in the fiscal fourth quarter too, continuing the trend of the first three quarters of fiscal 2017.
However, the company’s pessimistic guidance for the to-be-reported quarter makes us sceptical about its performance. Symantec’s revenue guidance range was much lower than the Zacks Consensus Estimate.
Moreover, continued investments to launch innovative products could affect margins in the soon-to-be reported quarter. Also, competition from major players like Microsoft (MSFT - Free Report) and smaller companies like Kaspersky, which are consistently rolling out comparable and competitive products, poses a concern.
Our proven model does not conclusively show that Symantec will beat on earnings 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 at least 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Symantec is 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 20 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Symantec carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrants a Look
Here are a couple of companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming release:
Snap Inc. (SNAP - Free Report) with an Earnings ESP of +42.49% and a Zacks Rank #3.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Symantec (SYMC) to Post Q4 Earnings: Will it Miss Estimates?
Symantec Corp. is set to report fourth-quarter fiscal 2017 results on May 10. Last quarter, the company posted a positive earnings surprise of 4.76%. Notably, over the trailing four quarters, the company beat estimates in two occasions, met in another and missed in the other, generating an average positive earnings surprise of 0.99%.
Let us see how things are shaping up for this announcement.
Factors to Consider
Symantec’s earnings and revenues have been under pressure due to persistent weakness in PC sales, which particularly hurt its core Norton anti-virus software business. Apart from this, intensifying competition from Palo Alto Networks, FireEye Inc. and Check Point Software has also been eroding the company’s market share in the enterprise segment.
As a result, the company has been solely focused on restructuring its business. In early 2016, Symantec closed the sale of the Veritas business to Carlyle Group for $7.4 billion. Symantec also completed the acquisition of Blue Coat, which enabled it to reduce dependence on the PC market and strengthen its position in the enterprise security space. Revenues from the enterprise security segment are now anticipated to contribute 62% to the company’s top line.
These restructuring initiatives will positively impact results in the fiscal fourth quarter too, continuing the trend of the first three quarters of fiscal 2017.
However, the company’s pessimistic guidance for the to-be-reported quarter makes us sceptical about its performance. Symantec’s revenue guidance range was much lower than the Zacks Consensus Estimate.
Moreover, continued investments to launch innovative products could affect margins in the soon-to-be reported quarter. Also, competition from major players like Microsoft (MSFT - Free Report) and smaller companies like Kaspersky, which are consistently rolling out comparable and competitive products, poses a concern.
Symantec Corporation Price and EPS Surprise
Symantec Corporation Price and EPS Surprise | Symantec Corporation Quote
Earnings Whispers
Our proven model does not conclusively show that Symantec will beat on earnings 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 at least 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Symantec is 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 20 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Symantec carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrants a Look
Here are a couple of companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the upcoming release:
DXC Technology Company (DXC - Free Report) with an Earnings ESP of +7.06% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Snap Inc. (SNAP - Free Report) with an Earnings ESP of +42.49% and a Zacks Rank #3.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>