Business Services' Q2 Earnings On Aug 8: IT, CVG & More

The earnings season is at its tail end with about 420 S&P 500 companies having reported results till Aug 4. Reconfirming broad-based expectations of better-than- expected results, total earnings of these 420 firms (accounting for 86.7% of the index’s total market capitalization) are up 11.6% year over year on 5.6% higher revenues, with 74.3% beating earnings estimates and 68.3% surpassing top-line expectations. Based on the hitherto observed pattern, second-quarter 2017 is anticipated to register high single-digit percentage earnings growth on a year-over-year basis.

Per the Earnings Preview, overall earnings for all the S&P 500 companies are expected to be up 10% on 5.1% growth in revenues. Although it represents a slightly tempered growth projection compared with the double-digit growth rate of the previous quarter, the dollar amount of the total earnings is on track to record an all-time high. The relative improvement in the quarterly performance is largely due to a turnaround in the economy, better job market scenario and rising oil prices. Experts widely believe that earnings growth is likely to be in double digits in 2018 and beyond.

For the second quarter as a whole, about four of the 16 Zacks sectors are expected to witness an earnings decline, with Conglomerates, Utilities and Retail/Wholesale being the biggest drag.

The Business Services sector appears reasonably healthy. For the sector, earnings are expected to improve about 9.9% year over year while sales are touted to rise 4.7% due to higher disposable income and new business initiatives.

Let’s take a sneak peek at four Business Services stocks scheduled to report second-quarter earnings tomorrow to see how things are shaping up for the upcoming results.

Gartner, Inc. (NYSE:IT) is scheduled to report results before the opening bell. The acquisition of CEB, an industry leader in providing best practice and talent management insights, further reinforces Gartner’s market strength. The combination of Gartner’s analyst-driven, syndicated research and advisory services with CEB’s best practice and talent management insights across a range of business functions is likely to provide a comprehensive and differentiated suite of services portfolio across the globe. (Read More: What's in the Cards for Gartner this Earnings Season?)

In the second quarter, the company’s earnings are expected to rise 17.2% year over year on 50.9% higher revenues. For the quarter, the company has an Earnings ESP of 0.00%, and Zacks Rank #2 (Buy), making an earnings prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) for a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Convergys Corporation (NYSE:CVG) is slated to report results after the closing bell. The company is a global leader of outsourced, integrated billing and customer care services. It focuses on developing long-term strategic relationships with clients in customer-intensive industries. We remain inconclusive on earnings beat prediction this quarter as the company has an ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Core-Mark Holding Company, Inc. (NASDAQ:CORE) is scheduled to report results before the opening bell. The company is a leading provider of fresh and broad-line supply solutions to the retail industry. For the quarter to be reported, this Zacks Rank #1 stock has an Earnings ESP of 0.00%, thus making an earnings prediction uncertain.

Envestnet, Inc. (NYSE:ENV) is slated to report results after the closing bell. The company is a leading provider of financial and wealth management software and services in the U.S. and internationally. For the quarter to be reported, this Zacks Rank #2 stock has an Earnings ESP of 0.00%, thus making an earnings prediction uncertain.

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