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ANSYS (ANSS) to Report Q2 Earnings: What's in the Offing?

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ANSYS Inc (ANSS - Free Report) is set to release second-quarter 2018 earnings on Aug 6.

Notably, the company has a positive record of earnings surprises in the trailing four quarters, with an average beat of 8.3%. The company delivered a positive earnings surprise of 13.2% in the last reported quarter.

ANSYS delivered strong results for first-quarter 2018. Notably, the company has adopted the new revenue rules of ASC 606.

First-quarter 2018 non-GAAP earnings came in at $1.20 per share (per ASC 606), better than management’s guidance of 90 cents to $1.05 per share. The Zacks Consensus Estimate was pegged at $1.06.

Non-GAAP revenues increased 11.7% (7% in constant currency) from the year-ago quarter to $283.3 million. The top line also crossed the high end of management’s guided range of $261-$281 million. The Zacks Consensus Estimate was pegged at $276.5 million.

What to Expect?

Per ASC 606, ANSYS expects non-GAAP earnings in the range of 94 cents to $1.09 per share for second-quarter 2018.  Non-GAAP revenues are anticipated in the range of $272-$292 million.

The Zacks Consensus Estimate for earnings exhibits an increase of 6.1% year over year to $1.05 per share for the to-be reported quarter. The consensus estimate for revenues is currently pegged at $290.4 million, up 10% year over year.

Notably, the stock has returned 38.1% year over year, outperforming the 32.3% rally of the industry.

Let’s see how things are shaping up for this announcement.

Factors Likely to Impact Q2 Results

Increasing demand for simulation particularly from industries like energy bodes well for ANSYS. The company’s collaborations with companies like NVIDIA, Ferrari, Taiwan Semiconductor, Synopsys and Grundfos have helped it to develop a varied range of products ranging from automotive reliability solutions, live simulation software to high performance steering wheels.

ANSYS bought France-based OPTIS. With the buyout, OPTIS’ feature-rich virtual reality (VR) platform will complement ANSYS offerings to help automotive manufacturers supply safer driverless vehicles. Safer navigation will be ensured by development of futuristic camera, lidar and radar.

The buyout of 3DSIM, a leading additive manufacturing simulation technology provider, will help ANSYS to foray into 3D metal printing and access the industry's only complete additive manufacturing simulation workflow.

Acquisitions like 3DSIM and OPTIS are not only enabling ANSYS to bring innovative solutions to the market but are also aiding it to enhance foothold in the competitive simulations market.

However, its margin is expected to remain under pressure as ANSYS continues to invest on product development.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ANSYS has a Zacks Rank #3 and an Earnings ESP of -4.04%. Consequently, surprise prediction is difficult.

Stocks to Consider

Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to deliver an earnings beat in their upcoming release.

Zillow Group, Inc. (ZG - Free Report) has an Earnings ESP of +3.84% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

PPL Corporation (PPL - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank of 3.

Jazz Pharmaceuticals PLC (JAZZ - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank of 3.

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