) is set to report first quarter 2014 results on Jul 12, 2013.
The company posted a 5.41% positive surprise last quarter. Let's
see how things are shaping up for this announcement.
Factors to Consider
Infosys reported a modest fourth quarter. Going forward,
margin contraction will remain a concern as the company expects
to continue with its flexible-pricing policy. Moreover,
Infosys' full-year guidance reflects sluggish revenue growth
amidst a volatile macroeconomic environment, which is expected to
hurt profitability in the near term.
However, the reappointment of Narayana Murthy comes as a
relief amid a time when the company has been suffering declining
profits for the past eight to ten quarters. Murthy, who was the
co-founder of the company, had a huge role to play in the
company's success by identifying and achieving new growth areas
and new business opportunities. Since he vacated office in 2011,
Infosys went through a rough patch and failed to retain the same
level of performance. Also, the company failed to procure new
contracts due to economic uncertainty. In addition, employee
dissatisfaction also became a concern.
Our proven model does not conclusively show that Infosys is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings Expected Surprise
Read: Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP
: That is because the Most Accurate Estimate stands at 68 cents
while the Zacks Consensus Estimate is higher at 69 cents. That is
a difference of -1.45%.
Zacks Rank #4 (Sell)
: Infosys has a Zacks Rank #4 (Sell), which lowers the
predictive power of ESP because the Zacks Rank #4 when combined
with a negative ESP makes surprise prediction difficult.
Other Stocks to Consider
Some other companies operating in the same industry that you
may want to consider as our model shows it has the right
combination of elements to post an earnings beat this
Angie's List Inc
) with an Earnings ESP of +12.00% and Zacks Rank #1 (Strong
) with an Earnings ESP of +13.04% and Zacks #2 Rank (Buy)
) with an Earnings ESP of +12.50% and Zacks Rank #2 (Buy)
ANGIES LIST INC (ANGI): Free Stock Analysis
INFORMATICA CRP (INFA): Free Stock Analysis
INFOSYS LTD (INFY): Free Stock Analysis
SYNAPTICS INC (SYNA): Free Stock Analysis
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