Novatel Wireless Inc.
) is scheduled to report fourth-quarter 2013 results after the
closing bell on Mar 6, 2014.
In the last quarter, the company delivered a 50.0% positive
earnings surprise. We will briefly discuss those factors which
will influence the earnings results.
Factors to Influence This Quarter
Increased demand for mobile broadband will boost Novatel's
performance in this quarter. The company currently serves the
three large wireless operators in the U.S., namely, Verizon
Wireless, AT&T and Sprint.
Novatel completed the acquisition of Enfora, a
machine-to-machine (M2M) intelligent asset management solutions
provider. Enfora has a long list of clientele including several
enterprises, applications service providers, original equipment
manufacturers (OEMs) and distributors. This acquisition will
strengthen Novatel's position in the fast growing M2M
However, we anticipate increasing competition for Novatel's
MiFi product line which may hamper the company's results in the
coming quarters. Some of the latest smartphones offer inbuilt
WiFi. Also, low-cost Asian manufacturers, including ZTE and
Huawei Technologies, have launched their own version of
intelligent mobile hot spots, creating competitive pressure on
Our proven model does not conclusively show that Novatel
Wireless is likely to beat the Zacks Consensus Estimate this
quarter. This is because a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately,
this is not the case here as elaborated below. The Sell-rated
stocks (#4 and 5) should never be considered going into an
Zero Zacks ESP:
The Most Accurate estimate and the Zacks Consensus Estimate are
poised at a loss of $0.15. Hence, the ESP is 0.00%.
Zacks Rank #3 (Hold):
Novatel Wireless' Zacks Rank #3 decreases the predictive power of
We caution investors against the stock going into the earnings
announcement, as a Zacks Earnings ESP of 0.00% combined with a
Zacks Rank #3 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are some other companies to consider as our model shows
these have the right combination of elements to post an earnings
beat this quarter.
) with earnings ESP of +25.00% and Zacks Rank #3.
) with earnings ESP of +5.88% and Zacks Rank #3.
) with earnings ESP of +3.57% and Zacks Rank #3.
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