The Q2 earnings season has started to gather steam, with 87 S&P 500 members, accounting for 25.7% of the index’s total market capitalization, having released their quarterly numbers.
Per the latest Earnings Preview, total earnings for these companies are up 20.9% from the same period last year on 10.3% higher revenues, with 86.2% surpassing earnings estimates and 77% beating revenue estimates.
Technology is one of the sectors anticipated to report double-digit earnings growth in the quarter to be reported. The tech sector’s total earnings are projected to be up 23.5% and revenues are expected to be 11% higher on a year-over-year basis.
The sector continues to benefit from emerging trends of artificial intelligence (AI), machine learning, augmented and virtual reality, (AR/VR) as well as increasing demand for cloud solutions and products. Moreover, growing adoption of autonomous car technology, advanced driver assisted systems (ADAS) and Internet of Things (IoT) presents significant growth opportunities.
Our research shows that a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) stock when combined with a positive Earnings ESP has high chances of beating earnings estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Meanwhile, 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.
Let’s take a look at the four technology companies that are set to report quarterly numbers on Jul 24.
Texas Instruments (TXN - Free Report) is set to report second-quarter 2018 results.
The company’s strength in several high-margin and high-growth areas of analog, and embedded processing markets are likely to drive its results in the soon-to-be-reported quarter. It continues to prudently invest its R&D dollars in these areas. This is gradually expanding its exposure in the industrial and automotive markets, and increasing dollar content at customers, while reducing exposure to volatile consumer/computing markets. (Read more: Texas Instruments Analog & Embedded to Aid Q2 Earnings)
Currently, Texas Instruments has a Zacks Rank #2 and an Earnings ESP of +0.96%, which indicates a likely positive surprise.
CoStar Group, Inc. (CSGP - Free Report) , a provider of information services to the commercial real estate industry, is slated to report second-quarter 2018 results.
Notably, the company delivered positive earnings surprise in the trailing three quarters, with an average beat of 20.5%. However, CoStar has an Earnings ESP of 0.00% and carries a Zacks Rank #3 (Hold), which does not indicate a likely positive surprise.
For the second quarter, management expects revenues in the range of $292-$295 million, representing revenue growth of 24% year over year. EBITDA is expected in the range of $66-$70 million.
Currently, CoStarGroup has a Zacks Rank #3 and an Earnings ESP of 0.00%, which does not indicate a likely positive earnings surprise in the to-be-reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Manhattan Associates, Inc. (MANH - Free Report) is set to report second-quarter fiscal 2018 results.
The company is a developer and provider of supply chain commerce solutions. Manhattan’s solutions enhance distribution efficiencies through the integration of supply chain constituents, including manufacturers, distributors, retailers, suppliers, transportation providers and end consumers.
Notably, the company delivered positive earnings surprise in the trailing three quarters, with an average beat of 6.38%. However, Manhattan Associates has an Earnings ESP of 0.00% and carries a Zacks Rank #3, which does not indicate a likely positive surprise.
Commvault Systems, Inc. (CVLT - Free Report) , a provider of Unified Data Management solutions for data protection, universal availability and simplified management of data on complex storage networks, is slated to report fiscal first-quarter 2019 results.
Notably, the company recorded negative earnings surprise in the trailing three quarters, with an average of 2.85%. CoStar Group has a Zacks Rank #3 and an Earnings ESP of -0.63%, which does not indicate a likely positive earnings surprise in the to-be-reported quarter.
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