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Thomson Reuters (TRI) Q1 Earnings: Stock Likely to Beat?

Zacks Equity Research
Updated

Thomson Reuters Corporation TRI is slated to report first-quarter 2017 results before the market opens on Apr 28. In the previous quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 2 cents.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with a positive earnings surprise of 6.77%. However, it remains to be seen if Thomson Reuters will be able to keep its earnings surprise streak alive this time.

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

Zacks Model Shows Likely Earnings Beat

Our proven model shows that Thomson Reuters 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.

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The Most Accurate estimate for the company stands at 55 cents while the Zacks Consensus Estimate is pegged at 53 cents. So, the difference – the Earnings ESP – is +3.77%. A positive ESP combined with the company’s Zacks Rank #2, makes us reasonably confident of earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Thomson Reuters Corp Price and EPS Surprise

 

Thomson Reuters Corp Price and EPS Surprise | Thomson Reuters Corp Quote

Factors this Quarter

President Trump’s “America first” rhetoric has been quite a dampener for the Technology Services industry. The implementation of several changes to immigration policies and H-1B work visa to create jobs and discourage outsourcing impacted the industry across the globe.

During the quarter, the company completed its acquisitions of Clarient Global LLC and Avox Limited. This deal expands its risk-management footprint and its ability to provide a best-in-class standard of customer solutions by integrating both businesses into its portfolio of risk management, compliance and data offerings.

In addition, the company also opened a lab in Singapore. The lab marks the first branch to open in Asia as part of Thomson Reuters Labs growing global network, joining locations in Boston, Cape Town, London, Waterloo and Zürich. The company will collaborate with the government, customers, tech startups and universities to create better products and service for its customers.

Management remains optimistic about the company’s future performance, given its constant endeavors to implement core strategies and progress toward achieving its financial goals. We believe that its cost-containment efforts, share buyback plan and impressive performance of the underlying subscription revenues (which account for most of the total revenue) bode well. However, adverse currency fluctuations may play a spoilsport in the quarter to be reported.

The company’s core subscription businesses continued to perform well and it is encouraging to see its Financial business reporting positive organic revenue growth. The company has been working tirelessly to achieve its earnings target for 2017. It also intends to keep improving its free cash flow per share. Further, the company aims to boost its organic growth via strategic investments in its highest growth market.

Other Stocks Poised to Beat Earnings

Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Fortive Corporation FTV has an Earnings ESP of +1.75% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

CNH Industrial N.V. CNHI has an Earnings ESP of +33.33% and a Zacks Rank #2.

EQT Corporation EQT has an Earnings ESP of +11.11% and a Zacks Rank #3.

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EQT Corporation (EQT): Free Stock Analysis Report
 
Thomson Reuters Corp (TRI): Free Stock Analysis Report
 
CNH Industrial N.V. (CNHI): Free Stock Analysis Report
 
Fortive Corporation (FTV): Free Stock Analysis Report
 
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