CA Inc. (
is set to report fourth-quarter fiscal 2014 results on May 15. Last
quarter, the company posted a positive earnings surprise of 17.65%.
Let us see how things are shaping up for this announcement.
Growth Factors this Past Quarter
Although CA reported better-than-expected third-quarter fiscal
2014 results, the top line compared unfavorably with the year-ago
quarter. CA's major revenue-generating segments were adversely
affected during the reported quarter, which led to a decline in
revenues. However, the company witnessed robust growth in
CA is witnessing rapid adoption of its Nimsoft Monitor Snap, a
feature-rich free utility version of its popular CA Nimsoft Monitor
solution. We believe that the breadth of its products and the
increased efficiency offered by them will help attract customers
across sectors, lending stability to the business model.
Additionally, CA's cloud expansion, recent strategic alliances
and restructuring initiatives remain on track. A decent renewal
rate, modest cash position and share repurchase activities also
On the other hand, increasing competition from
International Business Machines Corporation
) and Hewlett-Packard and exposure to Europe remain the near-term
Our proven model does not conclusively show that CA will beat
earnings this quarter. That is because a stock needs to have both a
and a Zacks Rank #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 56 cents. Hence, the difference is 0.00%.
CA's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes
surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Another Stock to Consider
Here is another company you may want to consider as our model
shows that it has the right combination of elements to post an
earnings beat this quarter:
), Earnings ESP of +1.18% and a Zacks Rank #2 (Buy)
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