We expect diversified technology company
Emerson Electric Company
) to beat expectations when it reports first quarter 2013
financial results on Feb 5, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Emerson is likely to beat earnings
because it has the right combination of two key ingredients,
namely a positive earnings Expected Surprise Prediction (ESP)
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3.
Earnings ESP, which represents the difference between the Most
Accurate estimate and the Zacks Consensus Estimate, is at +3.23%.
This is very meaningful and a leading indicator of a likely
positive earnings surprise for shares.
Zacks #3 Rank (Neutral):
Note that stocks with Zacks Ranks of #1, 2 and 3 have a
significantly higher chance of beating earnings. The sell rated
stocks (#4 and 5) should never be considered going into an
The combination of Emerson's Zacks Rank #3 (Hold) and +3.23%
ESP makes us very confident of a positive earnings beat on Feb
What is Driving the Better Than Expected Earnings?
Continued strength in Process Management, increased
investments in energy projects, strong backlog and deferred
recovery of sales from the Thailand flooding are expected to lead
to a positive earnings surprise in the upcoming quarter.
The positive trend is seen in the trailing four-quarter
average surprise of 0.36%, which was greatly helped by the 5.71%
surprise in the last reported quarter. This was possible because
Emerson did a good job of controlling expenses leveraging sales
volume. Strong end markets of the Process Management division
Other Stocks to Consider
Emerson is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 3 industry
), earnings ESP of +350% and Zacks #2 Rank (Strong Buy)
Juniper Networks Inc.
), earnings ESP of +7.14% and Zacks #2 Rank (Buy)
Clean Energy Fuels Corp.
), earnings ESP of +87.50% and Zacks #2 Rank (Buy)
CLEAN EGY FUELS (CLNE): Free Stock Analysis
EMERSON ELEC CO (EMR): Free Stock Analysis
INTERDIGITL INC (IDCC): Free Stock Analysis
JUNIPER NETWRKS (JNPR): Free Stock Analysis
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