Gartner (IT) Q3 earnings report preview: what to look for

What happened

Gartner is due to report its third-quarter earnings before market hours on Tuesday. Analysts expect revenue to fall 2.4% year over year, reversing last year’s 2.7% increase. In the prior quarter, Gartner reported revenue of $1.68 billion, flat year over year, and beat analysts’ revenue and earnings-per-share estimates.

Confirmed

Global impact / market context

A revenue decline would indicate weaker sales than a year earlier, potentially limiting the cash Gartner can use for operating costs and investment. The results will show whether the expected slowdown materializes; a revenue or earnings surprise could also shift investor expectations for the company’s business outlook.

Analyst inference

Analysts have generally reconfirmed their estimates over the past 30 days, while Gartner has missed revenue estimates multiple times in the last two years. Peer results vary: Grid Dynamics reported 9.7% revenue growth and beat estimates, while IBM reported 4.7% growth and also beat.

Confirmed

What to watch

1. Check reported third-quarter revenue against the expected 2.4% year-over-year decline; a smaller decline or growth would indicate sales were stronger than analysts currently expect. Analyst inference
2. Compare earnings per share, meaning profit allocated to each share, with analysts’ expectations; the article gives no forecast, so the result itself will provide the comparison. Analyst inference
3. Look for management’s explanation of sales trends and outlook, especially whether they suggest the expected revenue decline will continue or operating costs may need to adjust. Analyst inference

Evidence

• stockstory.org