What's in Store for Donnelley (DFIN) This Earnings Season?

Donnelley Financial Solutions DFIN is set to announce second-quarter 2020 results on Aug 5.

The Zacks Consensus Estimate for quarterly revenues is pegged at $225 million, calling for a decline of 13.1%, year on year. The consensus mark for earnings is pegged at 42 cents per share, suggesting a 43.2% year-over-year plunge.

The company had reported mixed results for the first quarter. Donnelley Financial’s first-quarter earnings topped the Zacks Consensus Estimate but revenues fell short of the same.

Notably, the company’s earnings surpassed estimates in three of the preceding four quarters and missed in the other, the average surprise being 27.2%.

Donnelley Financial Solutions Inc. Price and Consensus Donnelley Financial Solutions Inc. Price and Consensus

Donnelley Financial Solutions Inc. price-consensus-chart | Donnelley Financial Solutions Inc. Quote

Key Factors

Donnelley Financial’s quarterly performance might have been hurt by sluggish compliance filing transactional activities due to COVID-19-related shutdowns and business disruptions.

Global IPO and M&A activities were slow during the second quarter, which is likely to have adversely impacted the company’s top-line performance. Notably, IPO and M&A account for roughly 40% and 30%, respectively, of the company’s total transactional business.

Nonetheless, Donnelley Financial’s aggressive approach toward managing its cost structure is anticipated to have provided some cushion to the company during the period in discussion.

What Our Model Says

Our proven model does not predict an earnings beat for Donnelley Financial this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Donnelley Financial currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

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

Cogent Communications Holdings CCOI has an Earnings ESP of +11.66% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics SYNA has an Earnings ESP of +10.6 % and currently carries a Zacks Rank of 2.

Benefitfocus BNFT has an Earnings ESP of +6.25% and carries a Zacks Rank of 2, currently.

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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.

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