We expect storage solution provider
Western Digital Corp.
) to beat expectations when it reports fourth quarter 2014 results
on Jul 30.
Why a Likely Positive Surprise?
Our proven model shows that Western Digital is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
, which represents the difference between the Most Accurate
estimate ($1.81 per share) and the Zacks Consensus Estimate ($1.74
per share), is at +4.02%. This is very meaningful and a leading
indicator of a likely positive earnings surprise for shares.
Zacks Rank #2 (Buy):
Note that stocks with a 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 Western Digital's Zacks Rank #2 and +4.02% ESP
makes us very confident in looking for a positive earnings beat on
What's Driving the Better-Than-Expected Earnings?
Shift toward non-PC applications, secular growth of digital data,
modest growth in TAM and higher demand for storage are expected to
lead to a positive earnings surprise in the upcoming quarter.
Additionally, its growing exposure to the small and medium business
space and synergies from acquisitions remain growth drivers.
We remain encouraged by the company's launch of a string of storage
devices under the mobile and cloud segment. With such launches and
product innovations, we expect Western Digital to strengthen its
market position against the likes of
Moreover, it is noteworthy that Western Digital has surpassed the
Zacks Consensus Estimate over the past four quarters with an
average surprise of 5.5%.
Other Stocks to Consider
Western Digital is not the only firm looking up this earnings
season. Here are some other companies 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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WESTERN DIGITAL (WDC): Free Stock Analysis
CHARTER COMM-A (CHTR): Free Stock Analysis
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