Zacks Industry Outlook Highlights: StarTek, Vistaprint, Broadridge Financial Solutions, Ritchie Bros. Auctioneers and Copart

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Nov 22, 2013, 09:30 ET

CHICAGO, Nov. 22, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Business Services, including StarTek, Inc. (NYSE:SRT-Free Report), Vistaprint N.V. (Nasdaq:VPRT-Free Report), Broadridge Financial Solutions, Inc. (NYSE:BR-Free Report), Ritchie Bros. Auctioneers Inc. (NYSE:RBA-Free Report) and Copart, Inc. (Nasdaq:CPRT-Free Report).

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Industry: Business Services

Link: http://www.zacks.com/commentary/30033/business-services-stock-outlook---nov-2013

With almost 95% of the companies under the Business Service sector having reported their third quarter results, let's take a look at how things shaped up for the sector.

Earnings for the business sector grew 8.6% in the third quarter faring better than the overall 4.6% growth for the S&P 500 as a whole. The earnings growth pace, however, moved south compared with 9.9% growth in the second quarter.

Revenues showed an improvement of 3.9% faring much better than the S&P 500's year-over-year average of 2.9%. Revenue growth also improved sequentially.

In terms of surprises, the sector's performance was stronger than the broader market, with 84.2% of Business Services companies beating earnings expectations, compared to the 'beat ratio' of 65.7% for the S&P 500.

Looking ahead at the fourth quarter, earnings are expected to improve 15.2% compared with 9.5% for the broader market. Revenue growth is expected at 3.6% for the sector compared with a minimal improvement of 0.3% for the S&P 500.

For a detailed look at the earnings outlook for the Business Services and other sectors, please check our weekly Zacks Earnings Trends report.

Industry Review

Outsourcing: Of the 17 companies in our coverage, surprise from the industry ranged from -56.25% to 300% with an average of about 43%. The highest positive surprise came from StarTek, Inc. (NYSE:SRT-Free Report) with Vistaprint N.V. (Nasdaq:VPRT-Free Report) throwing the biggest negative surprise. For the upcoming quarter, we expect Zacks Ranked #1 Broadridge Financial Solutions, Inc. (NYSE:BR-Free Report) to come up with positive earnings surprise with a year-over-year increase of 38.2%.

Auction/Valuation: Of the 4 companies under this category, Ritchie Bros. Auctioneers Inc. (NYSE:RBA-Free Report) came up with the highest surprise of 36.4% while Copart, Inc. (Nasdaq:CPRT-Free Report) delivered the lowest surprise of -20%. Average earnings surprise for the industry was 5.3%.

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