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What to Expect from First Data (FDC) This Earnings Season?

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First Data Corporation (FDC - Free Report) is set to report fourth-quarter 2017 results on Feb 12.

The company has a Zacks Rank #3 (Hold) and an Earnings ESP of +1.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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.

We don’t recommend Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement.

First Data’s earnings surprise history has been decent as the company beat estimates in two of the last four quarters, with an average positive surprise of 3.01%.

We observed that First Data shares have rallied 9.4% in the past 12 months, outperforming its industry’s gain of 8.8%.

Q3 Highlights

In the third quarter, the company reported earnings of 40 cents, reflecting an 18% increase from the year-ago quarter. The figure was in line with the Zacks Consensus Estimate.

Consolidated revenues that include transaction and processing fees, product sales, reimbursable debit network fees, postage and other were $3.1 billion, up 5% year over year.

What We Are Expecting in Q4

First Data continues to expand its enterprise business. The company differentiates itself by consistently offering new features and solutions to existing clients and making continuous efforts to expand its client base. It continues to maintain its leading position in the bank-acquiring channel through strategic partnerships.

First Data is improving on its SMB direct business, which is expected to boost its GBS North American business. The company has been improving on both merchant and sales force attrition.

First Data completed the acquisition of one of its largest distribution partners, BluePay Holdings, Inc. last Dec.The deal will create a number of opportunities for First Data in the ERP space and help it better manage cash and other services for clients. The deal couldcontribute to First Data’s adjusted earnings per share (EPS) in the fourth quarter.

Conclusion

Overall, we believe that First Data’s focus on globalizing its offerings, cost management, strategic partnerships, along with its healthy business around large and small banks, will drive growth.

First Data Corporation Price and EPS Surprise

 

First Data Corporation Price and EPS Surprise | First Data Corporation Quote

Other Stocks to Consider

Here are a few stocks that you may want to consider as our model shows that these too have the right combination of elements to deliver a positive earnings surprise.

Applied Materials (AMAT - Free Report) , with an Earnings ESP of +0.57% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA (NVDA - Free Report) , with an Earnings ESP of +4.13% and a Zacks Rank #2.

Advanced Micro Devices (AMD - Free Report) , with an Earnings ESP of +8.72% and a Zacks Rank #3.

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