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MARKETS LIVE BLOG:

DOW POSTS 6TH DAY OF GAINS BUT NASDAQ SLIPS

Robinhood shares surge as company tops Wall St. estimates for quarterly profit, revenue

What to Expect from DST Systems' (DST) Q2 Earnings? - Analyst Blog

Zacks Equity Research
Updated

DST Systems Inc. DST is scheduled to report second-quarter 2015 results on Jul 23. Last quarter, the company posted a positive earnings surprise of 11.11%.

Let us see how things are shaping up for this announcement.

Factors to Consider

DST Systems’ business volume and massive scale of operation in Financial Services will attract customers, in our view. Moreover, steady contribution from the acquisitions should support revenue growth in the second quarter. Continued share buybacks and dividend payments are the other encouraging factors.

Nevertheless, decreasing organic revenue growth, tough competition from International Business Machines Corporation IBM and Fiserv Inc., and a high debt burden are likely to affect the to-be-reported quarter results.

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Earnings Whispers

Our proven model does not conclusively show that DST Systems is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Zacks ESP: ESP for DST Systems is 0.00% since the Most Accurate estimate of $1.46 per share is in line with the Zacks Consensus Estimate.

Zacks Rank: DST Systems’ Zacks Rank #2 when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some other companies, which you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Fortinet Inc. FTNT, with an Earnings ESP of +100.00% and a Zacks Rank #3.

Microsoft Corp. MSFT, with an Earnings ESP of +3.57% and a Zacks Rank #3.

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DST SYSTEMS (DST): Free Stock Analysis Report
 
MICROSOFT CORP (MSFT): Free Stock Analysis Report
 
INTL BUS MACH (IBM): Free Stock Analysis Report
 
FORTINET INC (FTNT): Free Stock Analysis Report
 
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Zacks Investment Research