First Data (FDC) Q4 Earnings: Is a Surprise in the Cards?

First Data CorporationFDC , a leading provider of electronic commerce solutions, is set to report fourth-quarter 2016 results on Feb 13. Last quarter, the company posted a positive surprise of 7.41%.

Over the last one year, the stock has outperformed the Zacks Business - Services industry. It has gained 67.7%, compared with the industry's gain of 11.3%.

Let's see how things are shaping up for this announcement.

Factors at Play

SMB turnaround: First Data has made steady progress with its SMB turnaround plan, which is expected to boost the company's North American merchant business.

Enterprise business: The company differentiates itself in this space by consistently offering new features and solutions to existing clients while making continuous efforts to expand its client base. In the third quarter, the company executed multiple enterprise wins.

Partnerships: Strategic partnerships are the most important part of First Data's growth program. The company has made good progress with its multi-product partnership with Wal-Mart WMT .

Key Metrics: With growth initiatives going as planned, the company is strengthening its balance sheet, expanding margins and improving cash generation capacity. Continued focus on innovation and strategic investments are expected to drive growth.

First Data Corporation Price and EPS Surprise

First Data Corporation Price and EPS Surprise | First Data Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that First Data will beat 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: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 30 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: First Data's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks That Warrant a Look

Here are some stocks that you may want to consider as our model shows these have the right combination of elements to post a positive earnings surprise:

Dollar Tree Inc. DLTR , expected to release earnings around Mar 7, has an Earnings ESP of +0.75% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Costco Wholesale Corp. COST , expected to report earnings on Mar 2, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.

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Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report

Dollar Tree, Inc. (DLTR): Free Stock Analysis Report

Costco Wholesale Corporation (COST): Free Stock Analysis Report

First Data Corporation (FDC): 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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