Computer Sciences Corporation
) is set to report fourth-quarter 2014 results on May 8. Last
quarter, the company posted a positive earnings surprise of
18.1%. Let us see how things are shaping up for this
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Growth Factors This Past Quarter
Computer Sciences posted mixed third-quarter 2014 results wherein
the bottom line surpassed the Zacks Consensus Estimate but the
top line lagged. Moreover, weak performances across all business
segments resulted in the decline in revenues on a year-over-year
Computer Sciences is adopting a cloud-based model and re-engaging
the salesforce in a more efficient way. We believe that this,
along with its cost rationalization initiatives will enable
margin expansion. Moreover, share buybacks are expected to
support the bottom line.
Furthermore, the company's traction in the cloud and partnerships
) are expected to drive growth, going forward.
However, the market is becoming competitive with companies like
CACI International Inc.
) and Accenture making their presence felt. Delay in the
government's order renewal process and constricted federal
spending are the near-term headwinds for the company.
Our proven model does not conclusively show that Computer
Sciences will beat earnings this quarter. That is because a stock
needs to have both a positive
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 $1.03. Hence, the difference is 0.00%.
Computer Sciences' 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.
Other Stocks 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).