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Symantec (SYMC) to Report Q3 Earnings: What Lies in Store?

Symantec Corp.SYMC is set to report third-quarter fiscal 2017 results on Feb 1. Last quarter, the company's earnings were in-line with the Zacks Consensus Estimate. Notably, the stock has surpassed the Zacks Consensus Estimate twice while matching the same once and missing on it once in the trailing four quarters. It has an average positive earnings surprise of 5.36%.

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

Factors to Consider

Symantec's earnings and revenues have been under pressure due to persistent weakness in PC sales, which particularly hurt its core Norton anti-virus software business. Apart from this, intensifying competition from Palo Alto Networks, FireEye Inc. and Check Point Software has also been eroding its market share in the enterprise segment.

As a result, the company has been singularly focused on restructuring its business. In early 2016, Symantec closed the sale of the Veritas business to Carlyle Group for $7.4 billion. Symantec also completed the acquisition of Blue Coat, which has enabled it to reduce dependence on the PC market and strengthen its position in the enterprise security space. Revenues from the enterprise security segment are now expected to contribute 62% to the company's top line.

These restructuring initiatives will positively impact results in the third quarter too, continuing the trend of the first half of fiscal 2017.

Nonetheless, continued investments to launch new and innovative products could impact margins in the soon-to-be reported quarter. Also, competition from major players like Microsoft MSFT and smaller companies like Kaspersky, which are consistently launching comparable and competitive products, poses a concern.

Earnings Whispers

Our proven model does not conclusively show that Symantec will beat earnings 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. But that is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Symantec is 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 21 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

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

Symantec Corporation Price and EPS Surprise

Symantec Corporation Price and EPS Surprise | Symantec Corporation Quote

Stocks to Consider

Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:

CEVA Inc. CEVA , with an Earnings ESP of +9.52% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

Twilio Inc. TWLO , with an Earnings ESP of +8.33% and a Zacks Rank #3.

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Symantec Corporation (SYMC): Free Stock Analysis Report

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CEVA, Inc. (CEVA): Free Stock Analysis Report

Twilio Inc. (TWLO): 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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