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IHS Markit (INFO) to Report Q4 Earnings: What's in Store?

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IHS Markit Ltd. (INFO - Free Report) is set to report fourth-quarter fiscal 2018 results on Jan 15, before the bell.

We observe that shares of the company have gained 4.1% in the past year against 0.8% decline of the industry it belongs to and 6.7% fall of the Zacks S&P 500 composite.

 

Let's check out the expectations in detail.

Top Line to Benefit From Segmental Strength

The Zacks Consensus Estimate for fourth-quarter fiscal 2018 revenues stands at $1.08 billion, indicating year-over-year growth of 14%. The top line is expected to benefit from strength across all segments – Resources, Transportation, Consolidated Markets & Solutions (CMS) and Financial Services.

Resources segment is expected to benefit from improving upstream energy business and strength across mid and downstream businesses. While Resources’ recurring revenues are likely to be driven by Chemicals, PGCR, and downstream pricing offerings, non-recurring revenues are expected to grow on improved consulting and software performance.

Transportation segment is expected to be positively impacted by growth within automotive product offerings (Aerospace, Defense & Security and Maritime & Trade product) and increasing penetration of its existing customer base and continued product innovation.

CMS is likely to gain from improving end markets and operational changes within the company’s product design, ECR and TMT businesses. Solid performance of pricing indices, valuation services, reg and compliance, analytics, enterprise data management and MarkitSERV derivatives processing is expected to boost Financial Services revenues.

IHS Markit Ltd. Revenue (TTM)

In third-quarter fiscal 2018, total revenues of $1.00 billion increased 11% year over year on a reported basis and 6% organically.

Earnings Likely to Rise Year Over Year

The Zacks Consensus Estimate for earnings per share in the to-be-reported quarter is pegged at 55 cents, indicating year-over-year growth of 5.8%. The expected growth is likely to be driven by streamlining of internal processes, higher customer engagement and prudent investments in product development. In third-quarter fiscal 2018, adjusted earnings per share of 58 cents increased 2% year over year.

Our Model Doesn’t Suggest a Beat

Please note that 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.

IHS Markit has an Earnings ESP of -0.18% and a Zacks Rank #4.

IHS Markit Ltd. Price and EPS Surprise

Key Picks

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on fourth-quarter 2018 earnings:

Clean Harbors (CLH - Free Report) has an Earnings ESP of +1.70% and a Zacks Rank #3. The company is expected to report results on Feb 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

Delphi Technologies (DLPH - Free Report) has an Earnings ESP of +0.61% and a Zacks Rank of #3. The company is expected to report results on Feb 20.

First Data (FDC - Free Report) has an Earnings ESP of +6.47% and a Zacks Rank #3. The company is expected to report results on Feb 11.

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