EPS Predictions
Analyst concensus has us at Q2 EPS of $0.21.
Last Q was $0.22, and given that the first quarter of the year is generally a strong one, there's no reason to believe that we won't exceed that.
My call is for $0.24.
This is based on:
1) the fact that Q1 is a good billing period. There are few days lost to vacations and holidays (something that actually has a huge impact on a services company).
2) the outsourcing and consulting market remains strong.
3) new deals (albeit not big ones) will add some incremental revenue,
4) dollar has stabilized, and perhaps even a little lower than last Q,
5) continued improvement in gross margins.
At an annualized EPS of $0.88 we're trading at a P/E of about 13.4 or thereabouts. This is still considerably lower than what it should be.
My prediction is a climb up to $12.50 then $13 in the two weeks after the earnings announcement.
There will be no huge surprises, good or bad, in the numbers released on Tuesday, just more solid numbers to back up the solid track record of consistency and profitability.
- Serge.