) is set to report second quarter 2014 results on Jul 23, 2014.
Last quarter, it posted in-line earnings. The company has posted an
average negative earnings surprise of 2.19% over the past four
Let's see how things are shaping up for this announcement.
Growth Factors This Past Quarter
We believe that a strategic focus shift towards cloud computing and
Big Data is a key growth catalyst. Also, the fact that the company
persistently ranks at the top of customer surveys for overall
satisfaction is a positive for EMC's operations. Moreover,
aggressive share repurchase will drive earnings, going forward.
Over the last few quarters, EMC has witnessed robust growth in
emerging storage product sales. Per IDC, the all-flash storage
array market is likely to be worth $1.2 billion by 2015. We believe
that emerging storage will continue to register strong growth in
the coming quarters, with sizable contributions from flash storage
products such as XtremIO arrays. The recent acquisition of DDSD
will further ramp up its flash portfolio.
However, increasing competition from the likes of IBM Corp. and
Hewlett-Packard and a sluggish IT spending outlook for the next
couple of years will continue to keep margins under pressure in the
Our proven model does not conclusively show that EMC 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.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 35 cents. Hence, the difference is of 0.00%.
Zacks Rank #3 (Hold):
EMC's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes
surprise prediction difficult.
We caution against stocks with Zacks #4 and #5 Ranks (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:
Silicon Motion Technology Corp.
), Earnings ESP of +33.33% and Zacks Rank #1 (Strong Buy)
F5 Networks Inc.
), Earnings ESP of +3.81%and Zacks Rank #2 (Buy)
Western Digital Corporation
), Earnings ESP of +4.02% and Zacks Rank #2 (Buy)
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EMC CORP -MASS (EMC): Free Stock Analysis
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SILICON MOTION (SIMO): Free Stock Analysis
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