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Korn/Ferry's (KFY) Earnings to Reflect Tax Benefits in Q2

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Korn/Ferry International (KFY - Free Report) is scheduled to report second-quarter fiscal 2019 results on Dec 5, after the bell.

The company has an impressive earnings surprise history. It has surpassed estimates in all of the trailing four quarters, the average being 11.5%.

The stock has gained 15.9% in the past year, against 4.4% decline of the industry it belongs to.

 

Let’s see how things are shaping up for the announcement

Broad-Based Revenue Growth

The company is likely to deliver broad-based revenue growth driven by unified branding and go-to-market approach. Strong growth is expected across Executive Search, RPO and Professional Search, and Advisory businesses.

The Zacks Consensus Estimate for fee revenues in the to-be-reported quarter is pegged at $483 million, reflecting growth of 9% from the year ago quarter’s actual figure. In the last reported quarter, fee revenues of $466 million increased 16% year over year.

Korn/Ferry International Revenue (TTM)

Earnings Likely to Grow on Tax Reform Policy

The U.S. Tax Cuts and Jobs Act (TCJA), which reduced corporate tax rates significantly, should benefit Korn/Ferry’s earnings in the to-be-reported quarter. The consensus estimate for earnings per share (EPS) is pegged at 80 cents, indicating year-over-year growth of 19.4%.

In first-quarter fiscal 2019, EPS of 78 cents surged 42% year over year.

Our Model Doesn’t Suggest a Beat

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.

Korn/Ferry has an Earnings ESP of 0.00% and a Zacks Rank #3, a combination that makes surprise prediction 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 a positive earnings surprise:

S&P Global, Inc. (SPGI - Free Report) has an Earnings ESP of +0.97% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

ICF International, Inc. (ICFI - Free Report) has an Earnings ESP of +1.22% and a Zacks Rank #3.

Waste Management, Inc. (WM - Free Report) has an Earnings ESP of +0.70% and a Zacks Rank #3.

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