S&P Global (SPGI) To Post Q4 Earnings: Is A Beat In Store?

S&P Global Inc. (NYSE:SPGI) is slated to report fourth-quarter 2017 results before the opening bell on Feb 6. Last quarter, the company reported adjusted earnings from continued operations of $274 million or $1.04 per share compared with $264 million or $1.00 per share in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 19 cents.

The company surpassed earnings estimates in each of the trailing four quarters, with an average positive earnings surprise of 11.1%.

Let’s see how things are shaping up prior to this earnings season.

Key Factors

The company’s strategic portfolio restructuring and focus on core business will continue to drive long-term growth.

The Zacks Consensus Estimate for S&P Capital IQ revenues is currently pegged at $433 million, up from $414 million reported in the third quarter. The successful integration of SNL Financial and corresponding synergies generated are likely to aid this rise. Total revenues are expected to be $1,503 million compared with reported revenues of $1,513 million in the previous quarter. Operating profit for Commodities & Commercial markets is expected to be $234 million, up from the third-quarter tally of $208 million. Also, Zacks Consensus Estimate for earnings per share is $1.63 compared with $1.71 in the prior quarter.

S&P Global has been consistently making strategic investments in businesses to facilitate long-term profitability. The formation of S&P Dow Jones Indices coupled with S&P Capital IQ’s acquisitions of Credit Market Analysis Limited, QuantHouse, R2 Financial Technologies and TheMarkets.com along with a significant stake in India’s leading rating agency CRISIL, position it well. This gives it an edge over competitors and allows it to grab a wider market through superior functionality and investor-oriented services.

Earnings Whispers

Our proven model conclusively shows that S&P Global is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +0.72%, with the former currently pegged at $1.64 and the latter at $1.63. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

S&P Global Inc. Price and EPS Surprise

S&P Global Inc. Price and EPS Surprise | S&P Global Inc. Quote

Zacks Rank: S&P Global has a Zacks Rank #2. This increases the predictive power of ESP and makes us reasonably confident of an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Zendesk, Inc. (NYSE:ZEN) has an Earnings ESP of +9.91% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AmerisourceBergen Corporation (NYSE:ABC) has an Earnings ESP of +1.28% and a Zacks Rank #3.

The Home Depot, Inc. (NYSE:HD) has an Earnings ESP of +0.29% and a Zacks Rank #3.

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