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What's in Store for Omnicom (OMC) This Earnings Season?

Omnicom Group Inc. OMC is scheduled to report fourth-quarter 2018 results on Feb 12, before market opens.

Notably, shares of the company have gained 9.8% in the past six months, against the industry’s decline of 10%.

Let’s see how things shape up for this announcement.

Top-Line Expectations

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $4.1 billion, indicating a 2.4% decline from the year-ago quarter’s figure. The top line is expected to be hurt by fall in acquisition revenues, net of disposition revenues, which is likely to be partially offset by higher organic revenue growth.

The Zacks Consensus Estimate indicates an organic revenue growth of 2.9% in the to-be reported quarter. However, the consensus mark for acquisition revenues indicates year-over-year decline of 2.5%.

In third-quarter 2018, revenues of $3.7 billion slipped 0.1% on a year-over-year basis. While acquisition revenues, net of dispositions declined 0.9%, organic revenue growth was 2.9% in the quarter.

Earnings Likely to Improve on Tax Benefits

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.66 per share, indicating year-over-year growth of 7.1%. The bottom line is expected to benefit from lower tax rates (as a result of Tax Cuts and Jobs Act) and improved operational efficiency.

In third-quarter 2018, adjusted earnings of $1.24 per share increased 9.7% on a year-over-year basis.

Omnicom Group Inc. Price and EPS Surprise


Omnicom Group Inc. Price and EPS Surprise | Omnicom Group Inc. Quote

Our Model Doesn’t Suggest a Beat

Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.

Omnicom has a Zacks Rank #2 and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult.

Stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) are best avoided, especially if the companies are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few other stocks from the Zacks Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat estimates in fourth-quarter 2018.

EVO Payments, Inc. EVOP has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is expected to release results on Mar 13. You can see the complete list of today’s Zacks #1 Rank stocks here.

Conduent Incorporated CNDT has an Earnings ESP of +0.95% and a Zacks Rank #3. The company is slated to release results on Feb 20.

IQVIA Holdings Inc. IQV has an Earnings ESP of +0.37% and a Zacks Rank #3. The company is slated to release results on Feb 14.

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Omnicom Group Inc. (OMC): Free Stock Analysis Report
Conduent Inc. (CNDT): Free Stock Analysis Report
IQVIA Holdings Inc. (IQV): Free Stock Analysis Report
EVO Payments, Inc. (EVOP): Free Stock Analysis Report
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