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Gartner (IT) to Post Q4 Earnings: What's in the Offing?

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Gartner, Inc. IT is scheduled to report fourth-quarter 2019 results on Feb 4, before the bell.

While the company’s top line is likely to have benefited from solid segmental performance, the bottom line is expected to have been weighed by rising expenses.

Shares of Gartner have gained 21.1% over the past year compared with 31.3% growth of the industry it belongs to.

Let's check out how things have shaped up for the announcement.

Segmental Growth to Drive Top Line

Strength across all the segments — Research, Conferences, and Consulting — is likely to have driven Gartner’s fourth-quarter 2019 revenues, the Zacks Consensus Estimate for which stands at $1.2 billion, indicating year-over-year growth of 10%.

Going by segments, the consensus estimate for Research revenues is pegged at $869 million, indicating growth of 9% from the prior-year quarter's reported figure. The segment is likely to have performed well on the back of additional sales headcount, productivity improvements and the combined effect of improved retention and new business.

The consensus mark for Conferences revenues is pegged at $223 million, indicating 13.8% increase from the year-ago quarter's reported figure. Growth in revenues from attendees and exhibitors, as well as that from single day local meetings is expected to have aided the segment.

The consensus estimate for Consulting revenues is pegged at $99 million, indicating year-over-year growth of 3.1%. Solid performance of labor-based and contract optimization business is likely to have boosted the segment.

In third-quarter 2019, revenues of $1 billion improved 9% year over year.

Gartner, Inc. Revenue (TTM)

Earnings Likely to Decline Year Over Year

Rising expenses are likely to have weighed on Gartner’s fourth-quarter 2019 earnings, the Zacks Consensus Estimate for which is pegged at 86 cents per share, indicating year-over-year decline of 28.3%. In third-quarter 2019, adjusted earnings per share of 70 cents decreased 18% year over year.

What Our Model Says

Our proven Zacks model does not conclusively predict an earnings beat for Gartner this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Gartner has an Earnings ESP of +1.85% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some 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 earnings this season:

Waste Management (WM - Free Report) has an Earnings ESP of +4.19% and a Zacks Rank #2. The company is slated to report results on Feb 13. You can see the complete list of today’s Zacks #1 Rank stocks here.

S&P Global SPGI has an Earnings ESP of +49% and a Zacks Rank #2. The company is slated to report results on Feb 6.

Fidelity National Information Services, Inc. FIS has an Earnings ESP of +0.45% and a Zacks Rank #2. The company is slated to release results on Feb 13.

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