The key fourth-quarter technology stocks' earnings releases have painted a rosy picture so far, thanks to improving PC shipments, strengthening data center market, increasing proliferation of IoT and growing clout of cloud-based applications despite softness in semiconductor space.
Per the latest Earnings Preview, Technology sector earnings are estimated to grow 2% year over year on revenue growth of 5.6%.
So far, the impressive earnings releases from Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , Intel (INTC - Free Report) , AMD and IBM buoy optimism.
While Apple’s fiscal first quarter benefited from a rebound in iPhone sales and solid performance by Wearables, Microsoft’s cloud business, Azure, drove its quarterly performance.
Moreover, Intel’s fourth-quarter performance benefited from growth in the data-centric businesses, driven by robust adoption of high-performance products, including the Xeon Scalable processors.
Further, IBM’s fourth-quarter results reflected an improving position in the hosted cloud, security and analytics. Moreover, the company provided promising bottom-line guidance for 2020.
Sneak Peek into Upcoming Tech Stock Earnings Releases
Investors interested in the technology sector are eagerly awaiting the upcoming earnings releases from players like Cognizant (CTSH - Free Report) , Paycom Software (PAYC - Free Report) , Twilio (TWLO - Free Report) and Ceridian (CDAY - Free Report) on Feb 5.
Cognizant’s fourth-quarter 2019 results are likely to have benefited from growing capabilities in areas like automation, digital engineering, cloud and IoT.
However, consolidation in the healthcare sector and sluggish spending by a couple of large banking clients are expected to have hurt the top line.
Moreover, this Teaneck, NJ-based company has an unfavorable combination of a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Notably, per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cognizant’s fourth-quarter earnings is pegged at $1.04 per share, unchanged over the past 30 days. (Read More: Cognizant to Report Q4 Earnings: What’s in Store?)
Meanwhile, Paycom’s fourth-quarter 2019 results are likely to have benefited from robust new business wins and the high-margin recurring revenue business.
However, this Oklahoma City, OK-based company is unlikely to report a beat this season as it has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of 0.00%.
Notably, the consensus mark for Paycom’s fourth-quarter earnings has been steady at 77 cents over the past 30 days. (Read more: Paycom to Post Q4 Earnings: What's in the Cards?)
San Francisco CA-based Twilio’s fourth-quarter 2019 results are likely to have benefited from an increasing clientele and the Sendgrid buyout. Growing adoption of Twilio Flex is also expected to have been a tailwind.
Nevertheless, though high-margin revenues from SendGrid are a boon, Twilio’s rising investments in low-margin international regions might strain its profitability.
Additionally, Twilio has an unfavorable combination of an Earnings ESP of -100.00% and a Zacks Rank #3.
Notably, the consensus mark for Twilio’s fourth-quarter earnings has been stable over the past 30 days at 1 cent per share. (Read more: Twilio to Post Q4 Earnings: What's in the Offing?)
Further, Minneapolis, MN-based Ceridian’s fourth-quarter 2019 results are expected to have benefited from improved traction of on-demand pay. Moreover, an expanding Dayforce clientele is expected to have aided recurring revenues.
However, Ceridian is unlikely to deliver a positive earnings surprise this season as it has an unfavorable combination of a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.
Notably, the consensus mark for fourth-quarter earnings has been steady at 11 cents per share over the past 30 days.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.7% per year. So be sure to give these hand-picked 7 your immediate attention.
See 7 handpicked stocks now >>