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CA Inc. (CA) to Report Q2 Earnings: What's in Store?

CA Inc.CA is set to report second-quarter fiscal 2016 results on Oct 21. Last quarter, the company posted a positive earnings surprise of 1.67%. It is worth noting that CA has outperformed the Zacks Consensus Estimate in all the four preceding quarters with an average positive earnings surprise of 10.26%.

Let us see how things are shaping up for this announcement.

Factors to Consider

CA reported mixed first-quarter results wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same. Revenues also declined year over year. The company's major revenue generating segments were adversely affected mainly by unfavorable foreign exchange impact.

Nonetheless, we believe that the breadth of CA's products and increased efficiency will attract customers across sectors, lending stability to its business model. The company's increased cloud exposure, modest cash position and share repurchase should aid results in the second quarter.

On the other hand, increasing competition from Oracle, International Business Machines and Hewlett-Packard HPQ and exposure to Europe may hurt result in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively show that CA will beat earnings estimates this quarter. 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. That is not the case here as you will see below.

Zacks ESP: Earnings ESP for CA is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 51 cents.

Zacks Rank: CA carries a Zacks Rank #4 (Sell). 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.

Stocks to Consider

Here are some companies which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Boyd Gaming Corp. BYD , with an Earnings ESP of +20.00% and a Zacks Rank #1.

Fiserv Inc. FISV , with an Earnings ESP of +3.09% and a Zacks Rank #2.

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FISERV INC (FISV): Free Stock Analysis Report

HEWLETT PACKARD (HPQ): Free Stock Analysis Report

CA INC (CA): Get Free Report

BOYD GAMING CP (BYD): 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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