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What's in Store for Synchronoss (SNCR) This Earnings Season?

Synchronoss Technologies SNCR is scheduled to report second-quarter 2020 results on Aug 10.

The Zacks Consensus Estimate for quarterly revenues stands at $75 million, indicating a 3.7% decline from the year-ago quarter. The consensus mark for bottom-line results suggests a loss per share of 25 cents, narrower than the 28 cents reported in the year-ago quarter.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in the other, the average surprise being 46.9%.

Let’s see how things have shaped up for the upcoming announcement.

Synchronoss Technologies, Inc. Price and Consensus Synchronoss Technologies, Inc. Price and Consensus

Synchronoss Technologies, Inc. price-consensus-chart | Synchronoss Technologies, Inc. Quote

Key Factors

Synchronoss’ second-quarter performance is expected to have been hurt by business disruptions caused by the COVID-19 pandemic. Retail store operators make up for significant contribution to the company’s revenues. However, as retail stores across the world remained closed during most of the March-June period, the company’s top line might have been adversely impacted during the second quarter.

However, the firm’s large deals with the likes of Verizon, Sprint, AT&T, British Telecom, Vodafone, Comcast, the three Japanese carriers, and others are likely to have helped weather the pandemic-induced economic downturn. The company generates about 70% of its recurring revenues from the aforementioned relationships, which provides it a solid base of revenues even during uncertain times.

Additionally, its cost-saving initiatives are likely to have boosted Synchronoss’ profitability during the quarter under review. The company’s cost-cutting measures include executives’ pay cut, reduction in workforce and contractors, facilities rationalizations, renegotiation of contracts with vendors and suppliers, and merit increase and bonus deferrals.

The company expects these measures to deliver approximately $55 million in annualized operating expenses reductions. Of the total, Synchronoss projects $45 million to be realized during the current year.

What Our Model Says

Our proven model does not predictan earnings beat for Synchronoss 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.

Synchronoss 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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