Snap On Tools Inc
) is set to report its fourth quarter 2012 results on Feb 7. Last
quarter, it posted a 2.4% earnings surprise. Let's see how things
are shaping up for this announcement.
Growth Factors This Past Quarter
Snap On is benefiting from its focus on expanding in the
emerging markets, extending into critical industries, enhancing
franchise network and expanding its presence in repair garage.
During the third quarter, the company faced severe unfavorable
currency headwinds, as a result of which two of the four
operating segments reported flat revenues. However, despite flat
revenues, gross margin during the quarter surged 61 basis points.
Our proven model does not conclusively show that Snap On is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
That is because the Most Accurate estimate stands at $1.36 while
the Zacks Consensus Estimate is higher at $1.37. That is a
difference of -0.73%.
Zacks #3 Rank (Hold):
Snap On Inc's Zacks #3 Rank (Hold) lowers the predictive power of
ESP because the Zacks #3 Rank when combined with a negative 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 witnessing
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:
), with earnings ESP of +350% and a Zacks #2 Rank (Strong
Juniper Networks Inc.
), with earnings ESP of +7.14% and Zacks #2 Rank (Buy)
Clean Energy Fuels Corp.
), with earnings ESP of +87.50% and Zacks #2 Rank (Buy)
CLEAN EGY FUELS (CLNE): Free Stock Analysis
INTERDIGITL INC (IDCC): Free Stock Analysis
JUNIPER NETWRKS (JNPR): Free Stock Analysis
SNAP-ON INC (SNA): Free Stock Analysis Report
To read this article on Zacks.com click here.