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Broadridge (BR) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research

Broadridge Financial Solutions Inc. BR is set to report third-quarter 2017 results on May 10. Last quarter, the company delivered a positive earnings surprise of 2.63%. Let's see how things are shaping up for this announcement.

Factors at Play

Broadridge reported mixed second-quarter results, wherein the bottom line surpassed the Zacks Consensus Estimate but the top line missed the same. Year-over-year comparisons on both the counts were favorable driven by higher recurring revenues, contribution from Net New Business, higher distribution revenues and acquisition-related synergies.

In a move to expand its global post-trade control capabilities, Broadridge recently acquired Message Automation Limited, a leading specialist provider of post-trade control solutions. The acquisition is believed to be highly important for Broadridge as it will strengthen its ability to transform its risk and compliance capabilities for complex asset classes.

We remain optimistic about Broadridge’s strategic acquisitions, product launches, share repurchase program and dividend-paying initiatives. We also believe that the company’s close association with Accenture ACN will be beneficial in the long run.

However, competition from DST Systems Inc. and pricing pressure remain headwinds.

Broadridge Financial Solutions, Inc. Price and EPS Surprise

Broadridge Financial Solutions, Inc. Price and EPS Surprise | Broadridge Financial Solutions, Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that Broadridgewill beat on earnings this quarter. This is because 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. That is not the case here as you will see below.

Zacks ESP: Broadridge’s ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 59 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Broadridge carries a Zacks Rank #3, which increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

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

Global Partners LP GLP, with an Earnings ESP of +233.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

TopBuild Corp. BLD, with an Earnings ESP of +5.26% and a Zacks Rank #2

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