Wesco International Inc
) is set to report third quarter 2013 results on Oct 24. Last
quarter it posted a 7.14% negative surprise. Let's see how things
are shaping up for this announcement.
Growth Factors This Past Quarter
Wesco's second quarter earnings of $1.25 per share missed the
Zacks Consensus Estimate by 10 cents. The revenue of Wesco was up
both sequentially as well as on a year over year basis.
The year-over-year increase in revenue was attributable to the
positive impact of acquisitions. Wesco has been able to maintain
a steady gross margin over the past year on the basis of its
integrated model and tight cost control.
For the longer term, Wesco is believed to benefit from its solid
strategies, strong operating model, market position and customer
clout. However, near-term results will continue to be impacted by
economic activity, given the company's exposure to core segments,
such as industrial, utility, construction and government that
should contain share price appreciation.
For the third quarter, Wesco expects year over year revenue to
increase by atleast 17%-19%. The gross margin is expected to be
at or above 20.8% while the operating margin is expected to be at
Our proven model does not conclusively show that Wesco is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
That is because the Most Accurate estimate stands at $1.38
while the Zacks Consensus Estimate is higher at $1.41. Hence, the
difference is -2.13%.
Zacks Rank #3 (Hold):
Wesco's Zacks Rank #3 (Hold) when combined with a negative ESP
makes surprise prediction difficult. We caution against stocks
with Zacks Ranks #4 and #5 (Sell rated stocks) going into the
earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
ARROW ELECTRONI (ARW): Free Stock Analysis
ASML HOLDING NV (ASML): Free Stock Analysis
JARDEN CORP (JAH): Free Stock Analysis Report
WESCO INTL INC (WCC): Free Stock Analysis
To read this article on Zacks.com click here.
), Earnings ESP of +0.83% and a Zacks #2 Rank (Buy)
), Earnings ESP of +2.00% and a Zacks Rank #1 (Strong Buy)
Asml Holding Nv
), Earnings ESP of +4.17% and a Zacks Rank #3 (Hold)