We expect securities exchange
Nasdaq OMX Group Inc.
) to beat expectations when it reports fourth quarter 2012
results on Jan 31, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Nasdaq is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP:
Nasdaq currently has an Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of 1.64% as the Most Accurate Estimate is at 62 cents and the
Zacks Consensus Estimate is at 61 cents.
Zacks Rank #3 (Hold):
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 Nasdaq's Zacks Rank # 3 (Hold) and +1.64%
ESP makes us expect a positive earnings beat on Jan 31.
What is Driving the Better Than Expected Earnings?
NASDAQ's cost reduction plan is expected to generate
significant cost savings in 2012. Further, the recent
acquisitions and proactive OTC market expansion initiatives are
expected to boost sales, leading to a positive earnings surprise
in the upcoming quarter.
A positive trend is seen in the trailing four-quarter average
surprise of 2.12%, which was greatly helped by the 6.67% and
3.33% surprise in the second and third quarters of 2012. This was
possible because Nasdaq did a good job of controlling expenses.
Improved revenues in the Issuer Services and Market Technology
segments also helped.
Other Stocks to Consider
Nasdaq is not the only company looking up this earnings
season. We also see likely earnings beats coming from these
CBOE Holdings, Inc.
), Earnings ESP of +2.38% and Zacks Rank #2 (Buy)
MarketAxess Holdings Inc.
), Earnings ESP of +2.86% and Zacks Rank #3 (Hold)
CBOE HOLDINGS (CBOE): Free Stock Analysis
MARKETAXESS HLD (MKTX): Free Stock Analysis
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
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