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Key Predictions for SPGI and NLSN Q1 Earnings on Apr 26

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The first-quarter earnings season is off to a good start,with results from 87 S&P 500 members already out. Per the latest Earnings Preview, total earnings for these companies are up 25% from the same period last year on 10.7% higher revenues, with 82.8% beating earnings per share (EPS) estimates and 67.8% beating revenue estimates. The proportion of companies beating both EPS and revenue estimates is 62.1%.

Total first-quarter earnings are expected to be up 18.3% year over year on 7% higher revenues.

Business Services Stocks’ Earnings to Watch Out For

The Business Services sector is one of the 11 Zacks sectors (out of total 16 Zacks sectors) expected to register double-digit earnings growth. Total earnings for the sector are expected to be up 11.4% on 4.6% higher revenues in first-quarter 2018.

Notably, Trump administration’s business-friendly approach, reduced tax rates, a strong U.S. economy, robust manufacturing activity and improvements in the labor market are currently major positives for the sector.

We observe that the sector has performed pretty well in the past year, significantly outperforming the S&P 500.  It has rallied 15.7%, which compares favorably with the S&P 500's gain of 12.2% in the said time frame.

 

Investors interested in business services stocks can watch out for two companies that are scheduled to report their first-quarter 2018 numbers on Apr 26, before market open.

S&P Global Inc. (SPGI - Free Report) is a provider of ratings, benchmarks, analytics and data to the capital and commodity markets. The company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for revenues and earnings is pegged at $1.54 billion and $1.98 per share, indicating year-over-year growth of 5.9% and 22.2%, respectively.

Top-line growth is expected to be driven by strength across all the segments — S&P Global Ratings, S&P Global Market and Commodities and S&P Dow Jones Indices. Benefits from lower tax rates, robust revenue growth and margin improvement backed by productivity initiatives, divestitures and synergies realization are expected to boost the company’s bottom line. (Read more: All Round Performance to Aid S&P Global in Q1 Earnings)

The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, with an average positive surprise of 12.8%. Additionally, the company has an Earnings ESPof +0.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

S&P Global Inc. Price and EPS Surprise

 

S&P Global Inc. Price and EPS Surprise | S&P Global Inc. Quote

Nielsen Holdings Plc is a leading global information and audience measurement company that offers information and analysis about consumers and consumer behavior to organizations. The company carries a Zacks Rank #3.

The Zacks Consensus Estimate for revenues and earnings is pegged at $1.62 billion and 48 cents per share, indicating year-over-year growth of 5.9% and 54.8%, respectively.

Continued strength in Nielsen’s Watch segment coupled with growth in emerging markets in the Buy segment, positive impact of foreign currency and net of acquisitions and dispositions, robust product portfolio and strategic partnerships are expected to boost the company’s top line. The bottom line is likely to be driven by revenue growth, margin expansion, lower restructuring charges and share repurchases. (Read more: What's in the Offing for Nielsen in Q1 Earnings?)

Nielsen has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in all the previous four quarters, resulting in an average negative surprise of 18.7%. The company has an Earnings ESP of 0.00%.

Nielsen Holdings Plc Price and EPS Surprise

 

Nielsen Holdings Plc Price and EPS Surprise | Nielsen Holdings Plc Quote

What Does the Zacks Model Predict?

Notably, a positive Earnings ESP along with a Zacks Rank #3, makes us confident of an earnings beat for S&P Global in the to-be-reported quarter.

However, our proven model does not conclusively show that Nielsen is likely to beat on earnings in the to-be-reported quarter. This is because the combination of Zacks Rank #3 and 0.00% Earnings ESP makes surprise prediction difficult.

Irrespective of an earnings beat or miss, investors are likely to focus on the companies’ fundamentals to make investment decisions. Therefore, don’t forget to check our full write up on earnings releases of these stocks later.

Other Releases

Investors interested in the same sector can keep an eye on first-quarter earnings reports from key players like FTI Consulting (FCN - Free Report) , CRA international (CRAI - Free Report) and Interpublic Group of Companies (IPG - Free Report) . While FTI Consulting and CRA International are slated to report quarterly numbers on Apr 26, Interpublic will release its results on Apr 27.

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