Communication network solution provider,
), is set to release its first-quarter 2014 results before the
opening bell on April 16, 2014.
Why a Likely Positive Surprise?
Our proven model shows that ADTRAN is likely to beat earnings
because it has the right combination of two key ingredients.
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +6.25%. The
Zacks Consensus Estimate is poised at 16 cents whereas the Most
Accurate estimate is 17 cents. This is a meaningful and leading
indicator of a likely positive earnings surprise.
ADTRAN currently has a Zacks Rank #3 (Hold). Note that stocks
with Zacks Ranks of #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a
significantly higher chance of beating earnings.
The combination of ADTRAN's Zacks Rank #3 and +6.25% ESP makes us
confident of positive earnings beat this release.
What is Driving the Better-Than-Expected
We expect an impressive performance from ADTRAN as the company
continues to perform well owing to strong contributions from the
U.S., Europe, the Middle East and Africa, and Latin American
regions. ADTRAN has stabilized its businesses with Tier 1
carriers and has also secured contracts from Tier 2 and 3
We expect the company to benefit from market share gain,
strong growth of core products, solid international sales and
growing service revenues. Notably, the company has reported
positive earnings surprise in the last four quarters.
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ADTRAN has also registered significant growth in its professional
service activities that deploy the Total Access System components
in telecommunication companies. Also, the company expects
professional services capabilities to remain in demand as both
domestic and international carriers seek cost-effective methods
to accelerate network deployment.
Other Stocks to Consider
Other companies you may want to consider on the basis of our
model which shows that these have the right combination of
elements to post an earnings beat this quarter include:
) with earnings ESP of +33.33% and Zacks Rank #3 (Hold).
) with earnings ESP of +3.77% and Zacks Rank #2 (Buy).
America Movil S.A.B. de C.V.
) with earnings ESP of +9.76% and Zacks Rank #3 (Hold).