Software Stocks Q2 Earnings On Jul 25: CDNS, MSTR & More

The second quarter earnings reports are trickling in thick and fast. As of Jul 21, approximately 103 S&P 500 members have reported their quarterly numbers. Of these 68.9% companies beat on earnings while 56.3% surpassed revenue estimates.

Despite this, the overall picture remains gloomy with total earnings coming 2.1% below the prior-year quarter. However, there has been1.4% year-over-year growth in the top line.

Numbers from the technology sector have been rather disappointing. Results from nearly 30% of the sector’s total market cap on S&P 500 have been released with consolidated earnings dropping 5% year over year and sales coming 2.6% lower than the comparable period last year. However, thanks to the low market expectations, over 80% of the companies have surpassed their estimates on both the top and bottom lines.

Nonetheless, it seems that this quarter might be a tad better than the last one. As per our Earnings Trend report, we expect Q2 earnings for the tech sector to decline only 3% in contrast to the 4.5% fall in Q1.The revenue picture is also looking better with expectations of 2.7% increase in Q2 compared with only 0.4% growth in Q1.

With this bit of optimism, let’s have a look at a few software stocks reporting this Monday.

Cadence Design Systems Inc. (NASDAQ:CDNS) is well-known for its electronic design automation software and hardware technology. It has an Earnings ESP of 0.00% as the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 18 cents. This Zacks Rank #3 (Hold) company has surpassed estimates in the trailing four quarters with an average beat of 30.67%.

MicroStrategy Inc. (NASDAQ:MSTR) develops enterprise ready analytics, security and mobile software platforms. The software company has been delivering weak results since the last quarter wherein it missed our earnings estimate by over 34%. This Zacks Rank #3 company has a Earnings ESP of -2.26%, which makes us less confident of a beat in the second quarter.

Smith Micro Software, Inc. (NASDAQ:SMSI) , a smaller player in the software space, offers software solutions to ease and enhance users’ mobile experience. This Zacks Rank #3 company surpassed earnings expectations in the last quarter by a whopping 50%. However, the company is yet to make profits. Also, its Earnings ESP is 0.00%, which reduces the possibility of a beat this quarter.

Xura, Inc. (NASDAQ:MESG) , a digital communications solutions provider, also carries a Zacks Rank #3. In the last quarter, the company delivered lower-than-expected loss. For this quarter, it has an Earnings ESP of 0.00%. This is because both Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 33 cents.