Adobe Systems Inc.
)is set to report fourth-quarter 2013 results on Dec 12. Last
quarter, it posted in-line results. Let's see how things are
shaping up for this announcement.
Growth Factors this Past Quarter
Adobe's third-quarter earnings of 22 cents exceeded the Zacks
Consensus Estimate by a penny due to solid cost management.
However, revenues were down sequentially and at the lower end of
management's guidance range due to faster-than-expected shift to
subscription pricing model leading to more deferred revenues.
Margin expansion was limited due to the change in sales mix,
which favored lower-margin products.
Adobe provided a decent outlook for the fourth quarter, with
revenues forecasted to increase 3.0% sequentially. Adobe expects
non-GAAP earnings per share in the range of 28 cents-34 cents,
above the Zacks Consensus Estimate of 19 cents.
Our proven model does not conclusively show that Adobe will
beat earnings this quarter. That is because a stock needs to have
both a positive
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 19 cents. Hence, the difference is 0.00%.
Adobe'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
Other Stocks to Consider
You could consider other stocks with a positive earnings ESP
and a Zacks Rank #1, 2 or 3 such as:
Winnebago Industries, Inc.
), with Earnings ESP of +10.26% and a Zacks Rank #1 (Strong
Worthington Industries, Inc.
), with Earnings ESP of +3.57% and a Zacks Rank #2 (Buy).
FactSet Research Systems Inc.
), with Earnings ESP of +0.81% and a Zacks Rank #2 (Buy).
ADOBE SYSTEMS (ADBE): Free Stock Analysis
FACTSET RESH (FDS): Free Stock Analysis
WINNEBAGO (WGO): Free Stock Analysis Report
WORTHINGTON IND (WOR): Free Stock Analysis
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