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Kforce (KFRC) to Report Q4 Earnings: What's in the Cards?

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Staffing company Kforce Inc. (KFRC is scheduled to report fourth-quarter 2016 results after market close on Feb 7.

In the last reported quarter, Kforce managed to marginally beat earnings by a penny. The company has a lackluster earnings track record for the past few quarters, beating earnings estimates in two of the trailing four quarters with an average positive earnings surprise of 0.25%.

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

Factors to Consider

Kforce provides professional and technical specialty staffing services and solutions globally. The company is in a restructuring mode as it continues to divest non-core operations and invest the proceeds in higher-growth markets.

For the fourth quarter, KForce expects skilled technology demand to be high as companies are becoming increasingly dependent on the efficiencies provided by technology and the need for innovation and strategies. Particularly Technology investment, mobility, cloud computing, cyber security, eCommerce, digital marketing, big data and business intelligence have contributed to the demand landscape for technology resources.

Advancement in these areas is likely to be critical across all industries for companies to remain competitive and meet the evolving customer expectations. The shortage of supply for these resources and the need for specialized skill sets will continue to drive demand.

The company's business is subject to government regulations and licensing and the failure to obtain all necessary licenses or approvals could adversely affect Kforce's financial results.

Due to a challenging macroeconomic environment, Kforce has been facing significant declines in a few of its largest clients over the past few quarters. Business disruption and internal organizational challenges faced by these clients have impacted its overall revenues and are likely to remain concerns in the impending quarter as well.

For the fourth quarter, the company expects revenues to be in the range of $325-$330 million with earnings in the range of 31-33 cents per share.

Kforce, Inc. Price and EPS Surprise

Kforce, Inc. Price and EPS Surprise | Kforce, Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that Kforce is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for a successful earnings beat. This is not the case here as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and Zacks Consensus Estimate, is currently -3.13%.You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Kforce has a Zacks Rank #3. This when combined with a negative ESP makes earnings prediction uncertain.

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

Stocks to Consider

Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

CNA Financial Corp. CNA has an Earnings ESP of +13.42% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Allison Transmission Holdings, Inc. ALSN has an Earnings ESP of +7.41% and a Zacks Rank #3.

Camden Property Trust CPT has an Earnings ESP of +0.88% and a Zacks Rank #3.

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CNA Financial Corporation (CNA): Free Stock Analysis Report

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Kforce, Inc. (KFRC): 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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