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What To Expect From WisdomTree In Q3 Earnings?

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WisdomTree Investments WETF is scheduled to report third-quarter 2017 results on Oct 27, before the market opens. Its revenues and earnings are expected to grow year over year.

The company is expected to benefit from increase in revenues supported by its strategic initiatives. However, rise in expenses due to its investments in technology and introduction of new products, and net outflows from currency hedged ETFs might offset the positives. The Zacks Consensus Estimate for Q3 earnings is 6 cents per share, up 7.1% year over year.

WisdomTree has a decent earnings surprise history. It surpassed earnings estimates in two of the trailing four quarters with an average positive earnings surprise of 0.9%.

Last quarter, this New York-based exchange traded fund and product sponsor reported earnings per share of 9 cents, which surpassed the Zacks Consensus Estimate of 7 cents. The company witnessed significant increase in net income. Also, higher assets under management (XISX:AUM) and lower expenses supported the results.

WisdomTree Investments, Inc. Price and EPS Surprise

Earnings Whispers

According to our quantitative model, we cannot conclusively predict an earnings beat for WisdomTree in the upcoming results. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen, which is not the case here as elaborated below:

(You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.)

Zacks ESP: The Earnings ESP for WisdomTree is -0.45%.

Zacks Rank: The stock currently carries a Zacks Rank of 3. We also need to have a positive ESP to be confident of an earnings beat.

Further, WisdomTree's activities during the to-be-reported quarter were inadequate to win analysts' confidence. As a result, the Zacks Consensus Estimate for the quarter remained stable over the last seven days.

Factors at Play

Outflows Might be Recorded: WisdomTree has significant exposure to internationally hedged products, particularly major currency-hedged funds — HEDJ and DXJ — which are highly unstable. Also, dollar weakness during the quarter might result in outflows.

Expenses Likely to Remain Elevated: WisdomTree remains focused on executing strategic growth initiatives, including expansion of distribution capabilities, investment in technology, launch of innovative products and addition of personnel. Such initiatives might have increased expenses in the third quarter.

Revenues Might Increase: WisdomTree's strategic agreement with Questrade is expected to boost growth of Canadian listed ETFs. Further, the consensus estimate for advisory fees of $57 million indicates a 9.6% increase year over year. Other income is expected to grow significantly to $0.73 million year over year for the to-be-reported quarter.

The consensus estimate for overall revenues of $58.3 million indicates a 12.5% increase over the prior-year quarter.

Stocks That Warrant a Look

Santander Consumer USA Holdings Inc. SC has an Earnings ESP of +6.54% and a Zacks Rank #2 (Buy). It is scheduled to third-quarter report results on Oct 27. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Earnings ESP for Credicorp Ltd. HTH is +0.19% and it carries a Zacks Rank of 3. The company is scheduled to release results on Nov 2.

Eaton Vance Corporation EV is scheduled to release results on Nov 21. Its Earnings ESP is +0.57% and it carries a Zacks Rank of 3.

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WisdomTree Investments, Inc. (NASDAQ: WETF): Free Stock Analysis Report
 
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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributorsEarnings News

 

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