What's In The Cards For S&P Global's (SPGI) Q4 Earnings?

S&P Global Inc. (NYSE:SPGI) is scheduled to release fourth-quarter 2019 results on Feb 6, before market open.

While the company’s top line is likely to have benefited from solid segmental performance, the bottom line is expected to have performed well on the back of revenue growth and benefits of productivity initiatives.

Over the past year, shares of S&P Global have gained 51.8%, outperforming 37% growth of the industry it belongs to and 17.8% rise of the Zacks S&P 500 composite.

Let’s check out the expectations in detail.

Segmental Growth to Drive Top Line

Strength across all the segments — S&P Global Ratings (“Ratings”), S&P Global Market Intelligence ("Market Intelligence"), S&P Global Platts ("Platts") and S&P Dow Jones Indices ("Indices") — is likely to have driven the company’s revenues in the fourth quarter. The Zacks Consensus Estimate for revenues stands at $1.70 billion, indicating growth of 10.7% from the year-ago period reported figure. In third-quarter 2019, total revenues of $1.69 billion increased 9% year over year.

Segment-wise, Ratings revenues are likely to have performed well on the back of strong high-yield issuance in the United States and Europe, and strong U.S. investment-grade issuance. Market Intelligence revenues are expected to have gained from growth in Desktop, Data Management Solutions, and Credit Risk Solutions. Platts revenues might have benefited from core subscription business and Global Trading Services. Indices revenues are likely to have been aided by gain in asset-linked fees and increase in exchange-traded derivative fees.

Bottom Line to Improve Year Over Year

Revenue growth and benefits of productivity initiatives are likely to have boosted S&P Global’s fourth-quarter 2019 earnings. The Zacks Consensus Estimate for earnings is pegged at $2.41 per share, indicating growth of 8.6% from the year-ago period reported figure. In third-quarter 2019, adjusted earnings of $2.46 per share increased 16% year over year.

What Our Model Says

Our proven Zacks model does not predict an earnings beat for S&P Global this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds 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.

S&P Global has an Earnings ESP of -0.07% and a Zacks Rank #2.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings this season:

Waste Management (NYSE:WM) has an Earnings ESP of +4.19% and a Zacks Rank #2. The company is slated to report results on Feb 13. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fidelity National Information Services, Inc. (NYSE:FIS) has an Earnings ESP of +0.30% and a Zacks Rank #2. The company is slated to release results on Feb 13.

Global Payments Inc. (NYSE:GPN) has an Earnings ESP of +1.57% and a Zacks Rank #2. The company is slated to release results on Feb 12.

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