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What's in Store for Resources Connection's (RECN) Q3 Earnings?

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Resources Connection, Inc. is slated to release third-quarter fiscal 2019 results on Apr 3, after the bell.

The company has an impressive earnings surprise history. Its earnings beat estimates in three of the trailing four quarter, with an average positive surprise of 35.4%. The stock has gained 16.7% year to date.

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

Revenues to Grow Y/Y

The Zacks Consensus estimate for revenues in the to-be-reported quarter is pegged at $184 million, reflecting year-over-year increase of 7%. The upside is likely to be driven by the company’s go-to-market initiatives.

The initiatives include increasing engagement of client service and technical sales teams with clients, aligning incentive compensation programs to sales growth and margin improvement and using an energized business development team and sales practices to accelerate new client acquisition and large client penetration.

A strong revenue performance is expected from North America in the to-be-reported quarter with a stable trend in Europe and Asia Pacific. The taskforce and Accretive Solutions acquisitions are expected to contribute significantly to the top line.

Resources Connection, Inc. Revenue (TTM)

Earnings to Be in Good Shape

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $184 million, reflecting year-over-year rally of 22.2%. The expected increase is likely to be driven by internal pricing improvement initiatives as well as lower medical costs.

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.

Resources Connection has an Earnings ESP of 0.00% and a Zacks Rank #3, a combination that makes surprise prediction difficult.

Stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) 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.

Stocks to Consider

Here are other 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 estimates.

Mastercard (MA - Free Report) has an Earnings ESP of +0.02% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avis Budget (CAR - Free Report) has an Earnings ESP of +19.61% and a Zacks Rank #3.

DocuSign, Inc. (DOCU - Free Report) has an Earnings ESP of +3.87% and a Zacks Rank #3.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

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Mastercard Incorporated (MA) - free report >>

Avis Budget Group, Inc. (CAR) - free report >>

DocuSign (DOCU) - free report >>

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