We expect financial transaction service provider
Alliance Data System Corporation
) to beat expectations when it reports third-quarter 2013 results
on Oct 17.
Why a Likely Positive Surprise?
Our proven model shows that Alliance Data is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP
: Expected Surprise Prediction or
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +0.79%. This is
noteworthy and a leading indicator of a likely positive earnings
Zacks Rank #2 (Buy)
: Note that stocks with a Zacks Rank #1, 2 or 3 have a
significantly higher chance of beating earnings. The sell-rated
stocks (carrying a Zacks Rank #4 or 5) should never be considered
going into an earnings announcement.
The combination of a Zacks Rank #2 (Buy) and +0.79% ESP makes us
confident about looking for a positive earnings beat by Alliance
Data on Oct 17.
What is Driving the Better-Than-Expected
Alliance Data remained focused in its national rollout plan of
the Dotz coalition loyalty program in Brazil. The loyalty program
was expanded into two new markets in Brazil's southern region.
The expansion marked the sixth and the seventh market penetration
Recently, it announced a 17% increase in average receivables of
the Private Label segment for the third quarter of 2013.
Additionally, Alliance Data's Retail Service division, Canadian
loyalty business and Epsilon have continually been inking
long-term deals ensuring steady revenue generation.
Alliance Data delivered positive surprises in 3 of the last four
quarters with the highest surprise coming at 4.13% in the second
quarter. Solid performances across all segments aided the upside.
Other Stocks to Consider
Alliance Data is not the only firm looking up this earnings
season. We also see likely earnings beats coming from these 3
), earnings ESP of +1.99% and a Zacks Rank #1 (Strong Buy).
Global Payments Inc
), earnings ESP of +0.98% and a Zacks Rank #2 (Buy).
American Express Company
), earnings ESP of +0.82% and a Zacks Rank #2 (Buy).
ALLIANCE DATA (ADS): Free Stock Analysis
AMER EXPRESS CO (AXP): Free Stock Analysis
FISERV INC (FISV): Free Stock Analysis Report
GLOBAL PAYMENTS (GPN): Free Stock Analysis
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