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Conduent (CNDT) Q3 Earnings to Reflect Impact of Divestitures

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Conduent Incorporated (CNDT - Free Report) will report third-quarter 2018 results on Nov 7, before the bell.

The company has an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 11.2%.

So far this year, shares of the company have gained 17.9%, outperforming the industry’s 7.8% growth.

 

How Are Estimates Faring?

The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.34 billion, indicating year-over-year decline of 9.3%. Impacts of strategic decisions to exit long accounts and non-profitable contracts, divestitures done in 2017, and adoption of 606 accounting standard are expected to continue weighing on revenues. In the last reported quarter, revenues totaled $1.39 million, down 7.3% on a year-over-year basis.

On the earnings front, the Zacks Consensus Estimate stands at 29 cents, reflecting year-over-year decrease of 31.8%. This year-over-year decline can be attributed to drop in overall revenues, investment (primarily in our sales force), 2017 divestitures completed in 2017 and the run-off of the company’s Student Loan business. In the last reported quarter, adjusted EPS of $29 cents rose 81.3% on a year-over-year basis.

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. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Conduent has an Earnings ESP of -2.61% and a Zacks Rank #3, a combination that makes surprise prediction difficult.

Stocks that Warrant a Look

Here are some stocks that you may want to consider as our model shows these have the right combination of elements to post a positive earnings surprise:

Broadridge Financial (BR - Free Report) has an Earnings ESP of +12.23% and a Zacks Rank #2. The company is slated to report first-quarter fiscal 2019 results on Nov 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

CenturyLink (CTL - Free Report) has an Earnings ESP of +10.29% and a Zacks Rank #2. The company is slated to report third-quarter results on Nov 8.

Houghton Mifflin Harcourt (HMHC - Free Report) has an Earnings ESP of +6.90% and a Zacks Rank #3. The company is slated to report third-quarter 2018 results on Nov 8.

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