The earnings season has reached its peak with about 117 S&P 500 companies having already released their results till Jul 26, reconfirming broad-based expectations of better-than-expected earnings. Total earnings for these 117 companies (accounting for 44.1% of the index’s total market capitalization) are up 8.8% year over year on 3.4% higher revenues, with 78.9% beating earnings estimates and 70.8% surpassing top-line expectations. Based on the hitherto observed pattern, second-quarter 2017 is anticipated to register high single-digit percentage earnings growth on a year-over-year basis.
Per the Earnings Outlook, overall earnings for all the S&P 500 companies are expected to be up 8.7% on 4.7% growth in revenues. Although it represents a slightly tempered growth projection compared with the double-digit growth rate of the previous quarter, the dollar amount of the total earnings is on track to record an all-time high. The relative improvement in the quarterly performance is largely due to a turnaround in the economy, better job market scenario and rising oil prices. Experts widely believe that earnings growth is likely to be in double digits in 2018 and beyond.
For the second quarter as a whole, about four of the 16 Zacks sectors are expected to witness an earnings decline, with Conglomerates, Utilities and Consumer Discretionary being the biggest drag.
The Business Services sector appears reasonably healthy. For the sector, earnings are expected to improve 9.2% year over year while sales are touted to rise 4.4% due to higher disposable income and new business initiatives.
Let’s take a sneak peek at three Business Services stocks scheduled to report second-quarter earnings on Monday to see how things are shaping up for the upcoming results.
ServiceMaster Global Holdings, Inc. (SERV - Free Report) is scheduled to report results before the opening bell. In the second quarter, the company’s earnings are expected to rise 3.5% year over year on 5.8% higher revenues. For the quarter, the company has an Earnings ESP of +2.90%, and Zacks Rank #4 (Sell), making an earnings prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
TriNet Group, Inc. (TNET - Free Report) is slated to report results after the closing bell. We remain inconclusive on an earnings beat this quarter as it has an ESP of 0.00% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
TrueBlue, Inc. (TBI - Free Report) is slated to report results after the closing bell. We remain uncertain on an earnings beat this quarter as it has an ESP of 0.00% and a Zacks Rank #3.
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