Trimming 2018 Estimate; 4Q17 Beats
- 4Q17 (Dec) EPS were 62 cents (vs an adjusted 57 cents last year), 11 cents above our estimate due to better-than-anticipated sales and margins, along with a 24% tax rate (vs our 26% projected);
- 2017 adjusted EPS was $2.10 (vs 2016’s $2.53 and the record $3.00 in 2015);
- Our 2018 estimate is now $1.88 (from $1.92) off 11% from 2017, as Syntel’s early projection is for customer budgets to be flat for the year, margins lower on growth-related investments, and a higher tax rate;
- For 2019, we are introducing our estimate at $2.00, up 7% from our 2018 projection.
Syntel is a provider of digital transformation, information technology and knowledge process outsourcing services. The company's segments include: Banking and Financial Services, which serves financial institutions throughout the world; Healthcare and Life Sciences, which serves healthcare payers, providers and pharmaceutical and medical device providers, among others; Insurance, which serves the needs of property and casualty insurers, insurance brokers, personal, commercial, life and retirement insurance service providers; Manufacturing, which provides technology services and business consulting; and Retail, Logistics and Telecom, which provides elimination and digital modernization solutions.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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