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ANSYS (ANSS) to Report Q1 Earnings: What's in the Cards?

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ANSYS (ANSS - Free Report) is set to report first-quarter 2019 results on May 1.

The company beat the Zacks Consensus Estimate in the trailing four quarters, with an average positive surprise of 27.7%.

In the last reported quarter, ANSYS’ earnings and revenues improved on a year-over-year basis and surpassed the corresponding Zacks Consensus Estimate.

What to Expect in Q1?

Per ASC 606, ANSYS expects non-GAAP earnings in the range of 98 cents to $1.11 per share for first-quarter 2019. Non-GAAP revenues are anticipated in the range of $290 million to $310 million.

The Zacks Consensus Estimate for earnings is pegged at $1.09 per share, suggesting a decline of 9.2% from the year-ago reported quarter. Notably, estimates have remained unchanged in the past 30 days.

The consensus for revenues is currently pegged at $305.88 million, indicating growth of 8.1% from the year-ago reported figure.

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

Factors at Play

ANSYS is witnessing robust demand for simulation particularly from industries like energy which favors top-line growth in the to-be-reported quarter. Moreover, increase in budgetary allocation for defense spending across Europe & the United States is likely to be a tailwind.

Further, 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, which will positively impact the upcoming quarterly results.

Buyouts to Enhance Footing in Simulation Market

In the quarter under review, ANSYS inked a deal to buy Granta Design in a bid to gain material intelligence capabilities. Synergies from Granta Design buyout enabled ANSYS to launch CES EduPack 2019 with an aim to aid educators in teaching fundamental topics.

In the quarter under review, the company also announced acquisition of Helic to gain electromagnetic crosstalk (noise analysis) capabilities to strengthen system on chip (SoC) 3D integrated circuit solutions.

ANSYS is also expected to benefit from the synergies of OPTIS and 3DSIM acquisitions. The buyouts are aiding the company to enhance its portfolio with virtual reality (VR) and additive manufacturing simulation capabilities.

ANSYS, Inc. Price and EPS Surprise

ANSYS, Inc. Price and EPS Surprise | ANSYS, Inc. Quote

The buyouts are expected to enable ANSYS in bringing innovative solutions to the market & enhance foothold in competitive simulations software market. The incremental adoption of these innovative products is expected to be positively impact in the upcoming results.

Product Rollouts Bode Well

Notably, the company recently unveiled ANSYS Cloud, which combines high-performance computing (HPC) infrastructure and Microsoft Azure platform with ANSYS software. Moreover, in a bid to enable engineers design more pervasive simulation solutions across multiple industries released ANSYS 2019 R1.

We believe adoption of these latest products will benefit top-line in the first quarter. 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. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

ANSYS has a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Paycom Software, Inc. (PAYC - Free Report) has an Earnings ESP of +3.17% and a Zacks Rank of 2. The company is scheduled to report first-quarter 2019 results on Apr 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Square, Inc. (SQ - Free Report) has an Earnings ESP of +5.50% and a Zacks Rank #2. The company is scheduled to report first-quarter 2019 results on May 1.

Ameren Corp. (AEE - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank #3. The company is scheduled to report first-quarter results on May 9.

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