) is set to report second-quarter 2014 results on Jul 30. Last
quarter, it posted a 25.0% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors This Past Quarter
Garmin posted strong first quarter 2014 results with both the top
and bottom lines surpassing the Zacks Consensus Estimate. The
bottom line exceeded expectations on the back of strong growth in
new products that are increasingly diversifying its business. The
revenue increase was driven by mix changes and reduced revenue
Garmin's results indicate that the company is successfully
diversifying its business away from the shrinking PND market. This
has been possible because of focused research and development
efforts that have resulted in a steady flow of innovative
higher-margin products. The company is also increasingly
collaborating with OEMs for product designing, which is leading to
greater volume, predictability and more stable pricing.
In the reported quarter, the traditional PND business shrank to
less than 50% of its total business, although Garmin remains the
market leader. On the other hand, Garmin is seeing good growth in
its target markets, all of which carry higher margins.
Our proven model does not conclusively show that Garmin will beat
estimates this quarter. That is because a stock needs to have both
and a Zacks Rank #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 75 cents. Hence, the difference is 0.00%.
: Garmin's Zacks Rank #3 (Hold), when combined with a 0.00% ESP
makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (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, which you may want to consider as
our model shows that they have the right combination of elements to
post an earnings beat this quarter:
- Charter Communications, Inc. (
), with Earnings ESP of +375.00% and a Zacks Rank #1 (Strong
- Synaptics Inc. (
), with Earnings ESP of +4.07% and a Zacks Rank #1
- TIM Participacoes S.A. (
), with Earnings ESP of +16.67% and a Zacks Rank #1
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GARMIN LTD (GRMN): Free Stock Analysis Report
CHARTER COMM-A (CHTR): Free Stock Analysis
TIM PARTICP-ADR (TSU): Free Stock Analysis
SYNAPTICS INC (SYNA): Free Stock Analysis
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