In the third quarter of 2021, the business services sector has been recovering gradually, backed by the gradual resumption of business activities and strength across both manufacturing and non-manufacturing activities. Notably, the increased rate of vaccination and relaxation of restrictions has lifted sentiments.
The quarter witnessed growth in major manufacturing industries like computer & electronic products; machinery; electrical equipment; appliances & components; transportation equipment; food, beverage & tobacco products; printing & related support activities; paper products; plastics & rubber products, and petroleum & coal products.
Among services industries, notable growth came in from transportation & warehousing; management of companies & support services; retail trade; wholesale trade; accommodation & food services; mining; utilities; construction; health care & social assistance; finance & insurance; information; educational services; and professional, scientific & technical Services.
Earnings Picture So Far, and Expectations
The third-quarter earnings for the S&P 500 members of the Business Services sector have been outstanding so far. The sector had a commendable start, with major players like Equifax EFX, IQVIA Holdings IQV, Robert Half RHI, S&P Global SPGI, Waste Management WM and Fiserv FISV beating on both earnings and revenues.
The latest Earnings Outlook suggests that earnings for those S&P 500 members of the business services sector that have reported results, grew 31% year over year on 17.2% revenue growth, with 83.3% of the same beating the Zacks Consensus Estimate for EPS and 87.5% of the same topping sales projections.
Total quarterly earnings for the S&P 500 members of the sector are currently anticipated to display 26.5% year-on-year growth, and revenues will likely reflect a 14.4% rise.
XPER, FA, RIOT, INST in Spotlight
Our quantitative model suggests that the combination of the following two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases 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.
Xperi Holding Corporation XPER: This California-based consumer and entertainment product/solutions licensing company is scheduled to report third-quarter 2021 results on Nov 8, after market close.
The Zacks Consensus Estimate for revenues is pegged at $223.84 million, indicating a 10.4% increase from the year-ago quarter’s reported figure. The consensus mark for earnings stands at 41 cents per share, indicating a rise of more than 100% from the prior-year quarter’s reported number.
Xperi has an Earnings ESP of 0.00% and carries a Zacks Rank #3.
Xperi Holding Corporation Price and EPS Surprise
Xperi Holding Corporation price-eps-surprise | Xperi Holding Corporation Quote
First Advantage Corporation FA: This Georgia-based provider of technology solutions for screening, verifications, safety, and compliance related to human capital worldwide is scheduled to report third-quarter 2021 results on Nov 8, before market open.
The Zacks Consensus Estimate for revenues is pegged at $171 million, indicating a sequential decline of 2.3%. The consensus estimate for earnings stands at 19 cents per share, implying sequential decline of 24%.
First Advantage has an Earnings ESP of 0.00% and a Zacks Rank #3.
First Advantage Corporation Price and EPS Surprise
First Advantage Corporation price-eps-surprise | First Advantage Corporation Quote
Riot Blockchain, Inc. RIOT is expected to register strong top- and bottom-line growth in the to-be-reported third quarter of 2021.
The Zacks Consensus Estimate for revenues is pegged at $77.35 million, indicating more than 100% increase from the year-ago quarter’s reported figure. The consensus mark for earnings stands at 41 cents per share, indicating a rise of more than 100% from the prior-year quarter’s reported number.
Riot Blockchain has an Earnings ESP of -13.94% and a Zacks Rank #1.(Read more: What’s in Store for Riot Blockchain in Q3 Earnings?)
Riot Blockchain, Inc. Price and EPS Surprise
Riot Blockchain, Inc. price-eps-surprise | Riot Blockchain, Inc. Quote
Instructure Holdings, Inc. INST: This Utah-based provider of cloud-based learning, assessment, development, and engagement systems is scheduled to report third-quarter 2021 results on Nov 8, after market close.
The Zacks Consensus Estimate for revenues stands at $101.63 million, indicating a sequential growth of 6.3%. The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at 14 cents per share, implying sequential decline of 12.5%.
Instructure has an Earnings ESP of 0.00% and a Zacks Rank #3.
Instructure Holdings, Inc. Price and EPS Surprise
Instructure Holdings, Inc. price-eps-surprise | Instructure Holdings, Inc. Quote
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.