Agilent Technologies Inc.
) is set to report first quarter 2013 results on Feb 14. Last
quarter it posted a 5% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
Though Agilent was affected by the recent economic downturn,
the company's sales growth rates in the fourth quarter were above
the prior quarter and better than Zacks consensus owing to strong
performance in all the segments except Electronic Measurement
segment. In particular, the company's life sciences segment has
been improving over the last few quarters due to the launch of
some new products.
The strength in the new Diagnostics segment was a positive for
overall gross margin, since the segment generates significantly
higher gross margins than the legacy Agilent business. Also, the
company's efficient cost management contributed to margin
expansion in the last quarter.
Though we believe that the company's efforts to introduce new
products will generate strong growth and help to grow its market
share, the heavy expenditure incurred due to the launch of these
products and higher input costs will remain a challenge for the
company. Also, the lingering macro conditions will continue to
affect the spending environment, not allowing much improvement in
the company's results in the near term.
The Zacks Consensus Estimate for the first quarter stands at
66 cents while that for fiscal 2013 stands at $3.03.
Agilent has missed estimates once in the last four quarters,
met estimates once, while beating estimates the other two times.
Moreover, the stock has seen downward estimate revisions in the
past 60 days.
The Zacks Consensus Estimate has remained unchanged for the
first quarter but was down by 0.3% for 2013 over the last 60
days. Over the last 90 days, the Zacks Consensus Estimate has
gone down by almost 12.0% and 9.6%, respectively for the first
quarter and fiscal 2013.
The downward pressure on estimates signals a weak first
quarter. Moreover, the stock carries a Zacks Rank #3 (Hold).
We caution against stocks with a Zacks Rank #4 and #5 (Sell
rated stocks) going into the earnings announcement, especially
when the company is seeing negative estimate revisions
Other Stocks to Consider
Our model states that astock needs to have both a positive
earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, #2 or #3 to beat earnings estimates. You
could, therefore, consider the following stocks
), with an ESP of +15.79% and a Zacks Rank #2 (Buy).
), with an ESP of +38.46% and a Zacks Rank #2 (Buy)
Scientific Games Corporation
), with an ESP of +33.33% and a Zacks Rank #3 (Hold)
AGILENT TECH (A): Free Stock Analysis Report
AUTODESK INC (ADSK): Free Stock Analysis
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SCIENTIFIC GAME (SGMS): Free Stock Analysis
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