The Service sector is widely diversified in nature and encompasses spaces like consulting, outsourcing, staffing and waste management, to name a few.
Through fourth-quarter 2020, the sector gradually kept recovering from the pandemic-induced weakness, thanks to the improving economy and expanding manufacturing and non-manufacturing activities that resulted from lockdown relaxations and resumption of business activities
The sector tried to balance between strength in services pertaining to transportation, warehousing, retail, wholesale, professional, technical, information, finance, education and health care, and weakness in accommodation, food services, entertainment, recreation, rental and leasing through the October-December period. It remained significantly weak when compared with the pre-pandemic level.
The fourth-quarter earnings so far and projections for the full cycle seem reflective of this weakness. Though some of the major S&P 500 players, such as Robert Half International RHI, Automatic Data Processing ADP and Aptiv APTV, have delivered stellar top- and bottom-line numbers, the latest Earnings Outlook suggests that earnings in total for those S&P 500 members of the business services sector, that have reported results, have slipped 4.5% year over year on 0.7% revenue growth.
Total quarterly earnings for the S&P 500 members of the sector are currently anticipated to display a 2.9% year-on-year drop, while revenues are estimated to reflect a 2.5% fall. This compares with the 3.6% and 3.9% decline in earnings and revenues in the third quarter of 2020, respectively.
Sneak Peek into Upcoming Earnings Releases
Here we discuss five business services companies, scheduled to report their fourth-quarter numbers on Feb 10.
Our quantitative model suggests that a company needs the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of a positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Interpublic Group of Companies IPG: This New York-based advertising and marketing services provider’s Zacks Consensus Estimate for revenues of $2.23 billion suggests an 8.5% decrease from the year-ago reported figure. Likewise, the consensus mark for earnings of 82 cents indicates a 6.8% decline from the prior-year reported number.
Interpublic has an Earnings ESP of 0.00% and currently carries a Zacks Rank #2 (Buy). (Read more: Interpublic to Report Q4 Earnings: What’s in the Cards?)
You can see the complete list of today’s Zacks #1 Rank stocks here.
Interpublic Group of Companies, Inc. The Price and EPS Surprise
Interpublic Group of Companies, Inc. The price-eps-surprise | Interpublic Group of Companies, Inc. The Quote
The Western Union Company WU: This Denver-based money movement and payment services provider’s Zacks Consensus Estimate for revenues is pegged at $1.26 billion, calling for a 3.5% decline from the year-ago quarter’s reported figure. The consensus estimate for earnings is pinned at 42 cents, suggesting a year-over-year decrease of 10.5%.
Western Union has an Earnings ESP of 0.00% and holds a Zacks Rank of 2, at present.
The Western Union Company Price and EPS Surprise
The Western Union Company price-eps-surprise | The Western Union Company Quote
IQVIA Holdings IQV: This North Carolina-based advanced analytics, technology solutions, and contract research services provider’s Zacks Consensus Estimate for revenues is pegged at $3.15 billion, indicating growth of 8.8% from the year-ago quarter’s reported figure. The consensus estimate for earnings is pegged at $2, calling for a year-over-year increase of 15.5%.
IQVIA has an Earnings ESP of +1.22% and carries a Zacks Rank #4 (Sell), currently. (Read more:What’s in Store for IQVIA Holdings in Q4 Earnings?)
IQVIA Holdings Inc. Price and EPS Surprise
IQVIA Holdings Inc. price-eps-surprise | IQVIA Holdings Inc. Quote
Equifax EFX: This Georgia-based information solutions and human resources business process outsourcing services provider’s Zacks Consensus Estimate for revenues is pinned at $1.09 billion, suggesting a 19.9% increase from the year-ago reported figure. Likewise, the consensus mark of $1.83 for earnings indicates a 19.6% jump from the prior-year reported number.
Equifax has an Earnings ESP of +1.44% and presently carries a Zacks Rank of 3. (Read more: Is a Beat in the Cards for Equifax in Q4 Earnings?)
Equifax, Inc. Price and EPS Surprise
Equifax, Inc. price-eps-surprise | Equifax, Inc. Quote
Lumen Technologies LUMN: This Louisiana-based facilities-based communications company’sZacks Consensus Estimate for revenues of $5.13 billion suggests an 8% decrease from the year-ago reported figure. Likewise, the consensus estimate for earnings of 32 cents indicates a 3% decline from the prior-year reported number.
Lumen Technologies has an Earnings ESP of 0.00% and carries a Zacks Rank #3, currently. (Read more: Will Top-Line Contraction Affect Lumen’s Q4 Earnings?)
Lumen Technologies, Inc. Price and EPS Surprise
Lumen Technologies, Inc. price-eps-surprise | Lumen Technologies, Inc. Quote
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