We expect diversified power management company
) to beat expectations when it reports third quarter 2013 results
before the market opens on Oct 25.
The company had missed the earnings consensus in the second
quarter by 1.80%.
Why a Likely Positive Surprise?
Our proven model shows that Eaton is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP
: Expected Surprise Prediction or
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at +2.68%. This is
a meaningful and leading indicator of a likely positive earnings
surprise for the shares.
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 Eaton Corporation's Zacks Rank #3 (Hold) and
+2.68% ESP makes us confident of an earnings beat this quarter.
What is Driving the Better-than-Expected
Eaton's presence in over 175 countries across the globe
diversifies any region-specific risk with ample options to make
up for any revenue shortfall in any particular region or market.
Consistent investment in Research & Development helps the
company to improve the quality of its product offering and
improvise new products. This expands the company's operations and
In addition, solid performance from the acquired assets is
helping the company to post better numbers. We expect this trend
to continue this quarter.
Other Stocks to Consider
Eaton is not the only firm looking up this earnings season. We
also see likely earnings beats coming from others operating in
ACUITY BRANDS (AYI): Free Stock Analysis
EATON CORP PLC (ETN): Free Stock Analysis
LITTELFUSE INC (LFUS): Free Stock Analysis
SANMINA CORP (SANM): Free Stock Analysis
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), with an Earnings ESP of +1.67% and Zacks #2 Rank (Buy)
Acuity Brands, Inc
), with an Earnings ESP of +1.18% and Zacks #3 Rank (Hold)
), with an Earnings ESP of +2.86% and Zacks #3 Rank (Hold)