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Business Service Stocks' Q4 Earnings on Jan 26: ADS & RHI

The Q4 earnings are off to a good start, with earnings and revenue growth looking pretty decent compared to the last few reported quarters. We are looking forward to seeing more sectors coming out with positives surprises.

Per the latest Earnings Preview report, 63 S&P 500 companies have reported earnings till Jan 20, accounting for 19.2% of the index's total market capitalization, with 66.7% topping EPS (earnings per share) estimates and 50.8% coming in ahead of top-line expectations. If the positive trend continues we will move into the positive territory.

Earnings of all the S&P 500 companies combined are expected to rise by 4.8% from the year-ago period on revenue growth of 3.7%.

Five out of 16 Zacks sectors are expected to witness a decline in earnings in the fourth quarter, with Conglomerates, Autos and Transportation being the biggest drag. However, the Oil/Energy sector is expected to see some light in the tunnel, first time after eight quarters of declines.

The Business Services sector is looking reasonably good once again. For the sector, earnings are expected to grow 5.6%, while sales are touted to rise 8.0% from the last year. The projected improvement is majorly driven by the growing momentum in the economy as a whole and the job market during the quarter.

Let's have a sneak peek at two major Business Service Stocks set to release their fourth-quarter results tomorrow.

Alliance Data Systems Corporation (ADS is scheduled to report its numbers before the opening bell. Notably, over the trailing four quarters, the company delivered an average positive surprise of approximately 3.27%, beating estimates thrice.

Alliance Data Systems Corporation Price and EPS Surprise

Alliance Data Systems Corporation Price and EPS Surprise | Alliance Data Systems Corporation Quote

Headquartered in Plano, TX and founded in 1996, Alliance Data is the largest private label credit card processing firm for mid-market specialty retail stores in the U.S. It provides transaction, marketing and credit services in the United States, Canada and internationally.

Our proven model conclusively shows that Alliance Data is likely to beat earnings once again. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today's Zacks #1 Rank stocks here .

The combination of Alliance Data's Zacks Rank #3 and ESP of +0.23% makes us confident of an earnings beat (read more: Alliance Data to Report Q4 Earnings: A Beat in Store? ).

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Robert Half International Inc.RHI is set to report its results after the market closes . Last quarter, this global staffing firm posted a positive earnings surprise of 1.43%.

In the last four quarters, Robert Half delivered positive earnings surprises in two, a negative surprise in one and in-line earnings in one, resulting in an average positive surprise of 0.03%.

Robert Half International Inc. Price and EPS Surprise

Robert Half International Inc. Price and EPS Surprise | Robert Half International Inc. Quote

Robert Half is the world's largest specialized provider of temporary and permanent personnel in the fields of accounting and finance. Robert Half's total revenue has been growing driven by higher demand for its professional staffing and consulting services, owing to improved labor markets, low unemployment in numerous professional occupations and improved economic backdrop in many of its non-U.S. markets. However, earnings were hurt in the preceding quarter as the company's clients took longer to make hiring decisions.

Robert Half's Zacks Rank #2 when combined with an ESP of -1.56% makes surprise prediction difficult (read more: Robert Half to Report Q4 Earnings: What's in Store? ).

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Robert Half International Inc. (RHI): Free Stock Analysis Report

Alliance Data Systems Corporation (ADS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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