What's In The Offing For Jack Henry's (JKHY) Q2 Earnings?

Jack Henry & Associates, Inc. (NASDAQ:JKHY) is scheduled to report fiscal second-quarter 2020 results on Feb 4.

For the fiscal second quarter, the Zacks Consensus Estimate for sales is pegged at $411.61 million, indicating growth of 6.6% from the prior-year quarter.

Further, the consensus mark for earnings per share is pegged at 89 cents per share, which suggests an improvement of 1.1% from the year-ago quarter.

The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters by 4.42%, on average.

In the fiscal first-quarter 2020, Jack Henry reported earnings of $1.16 per share, with a positive earnings surprise of 11.54%. The figure surged 7.4% on a year-over-year basis.

Revenues improved 12% year over year to $438 million. The figure outpaced the Zacks Consensus Estimate of $421 million.

Factors to Consider

Jack Henry’s fiscal second-quarter results are likely to reflect strength across all the segments — Core, Payments, Complementary and Corporate & Other. Moreover, its expanding solutions portfolio is expected to have contributed to the to-be-reported quarter’s performance.

The company’s robust core solutions are expected to have sustained momentum across core customer contracts in the to-be-reported quarter, which in turn is likely to have benefited the fiscal second-quarter top-line.

Notably, Jack Henry Banking added a client namely Parkside Financial Bank & Trust in the quarter under review. The latter utilizes the company’s SilverLake System core platform in order to achieve flexibility, digital functionality and work efficiency.

Additionally, the company’s consumer bill pay product lines that allow financial institutions to offer near-real-time card-funded bill payments using credit and debit cards, are likely to have aided the performance of its Payments segment’s performance in the to-be-reported quarter.

Jack Henry rolled out iPay CardPay in the fiscal second quarter, which expanded its consumer bill pay product offerings. This is expected to have helped it in gaining further traction among the financial institutions in the quarter under review.

Further, the company strengthened the financial performance suite of ProfitStars and introduced an integrated, cloud-hosted asset liability management (ALM) solution for banks and credit unions in the fiscal second quarter. This is also likely to have driven the company’s Payments revenues in the to-be-reported quarter.

Additionally, growing momentum of Banno Digital suite, new card processing solution and treasury management are likely to have driven the fiscal second-quarter performance.

Further, well-performing debit and credit processing solutions are anticipated to have bolstered the company’s debit and credit clientele during the fiscal second quarter.

All the factors are likely to have aided Jack Henry’s performance in the quarter under review.

However, continuous declining license revenues due to customer migration to private cloud are expected to have negatively impacted the fiscal second-quarter margins.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Jack Henry this time around. 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.

Jack Henry has an Earnings ESP of 0.00% and a Zacks Rank #2.

Stocks to Consider

Here are some stocks you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Advanced Energy Industries, Inc. (NASDAQ:AEIS) has an Earnings ESP of +10.80% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Microchip Technology (NASDAQ:MCHP) has an Earnings ESP of +1.33% and a Zacks Rank of 1.

Bruker Corporation (NASDAQ:BRKR) has an Earnings ESP of +0.86% and a Zacks Rank #2.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>