) is set to report first-quarter 2014 results on Apr 17. Last
quarter, it posted a 1.89% positive surprise. Let's see how
things are shaping up for this announcement.
Growth Factors This Past Quarter
The first quarter seemed promising for the company as it
announced a strategic acquisition with Fieldglass, cloud-based
vendor management system (VMS) solution provider. With this
acquisition, SAP will be able to help employers manage flexible
workforce that can be quickly employed and engaged to support
rapidly changing business and customer needs. Further, during the
first quarter, SAP also announced an 18% dividend increase to
€1.00 per share. This apart, the company's cloud business and its
core software solutions business have been key catalysts, driving
double-digit growth for the company.
Along with its fourth-quarter earnings, the company provided
its mid-term 2014 guidance. SAP expects the combination of a
stable, highly profitable core and fast-growing cloud business to
deliver continued growth and lead to margin expansion. The
company aims to further increase its total revenue to at least
€20 billion and total revenue from its cloud business including
cloud-related professional services to approximately €2 billion
Our proven model does not conclusively show that SAP is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive
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 $0.61 while
the Zacks Consensus Estimate is higher at $0.62. That is a
difference of -1.61%.
Zacks Rank :
Sap's Zacks Rank #3 (Hold) lowers the predictive power of ESP
because the Zacks Rank #3 when combined with a negative ESP makes
surprise prediction difficult. We caution against stocks with
Zacks Rank #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 are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
The Descartes Systems Group Inc.
), with Earnings ESP of 20.00% and Zacks Rank #2 (Buy).
Rosetta Stone, Inc.
), with Earnings ESP of 50.00% and Zacks Rank #2.
), with Earnings ESP of 28.6% and Zacks Rank #2.
DESCARTES SYS (DSGX): Free Stock Analysis
INVENSENSE INC (INVN): Free Stock Analysis
ROSETTA STONE (RST): Free Stock Analysis
SAP AG ADR (SAP): Free Stock Analysis Report
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