Analog Devices, Inc.
) is set to report first-quarter 2014 results on Feb 18. Last
quarter, it posted 6.9% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
Analog's fourth-quarter 2013 earnings were above the Zacks
Consensus Estimate driven by strong revenue growth coupled with
better gross margins and solid expense management. Additionally,
revenues were up sequentially driven by strength in the
Gross margins expanded in the quarter attributable to higher
factory utilization and lower manufacturing costs. However,
operating margin of 29.5% was down 150 basis points from the
Analog provided a weak outlook for the first quarter, with
revenues expected to decrease in the range of -5% to -10%
sequentially. The company estimates gross margin in the range of
64.0-65%, tax rate to be approximately 13% and earnings per share
in the range of 44 -52 cents.
Our proven model does not conclusively show that Analog
Deviceswill 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 48 cents. Hence, the difference is 0.00%.
Analog Devices has a Zacks Rank #3 (Hold) which, 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:
Westlake Chemical Corp.
), with Earnings ESP of +4.50% and a Zacks Rank #1 (Strong
Ship Finance International Limited
), with Earnings ESP of +52.63% and a Zacks Rank #1
), with Earnings ESP of +13.59% and a Zacks Rank #1
ANALOG DEVICES (ADI): Free Stock Analysis
PROASSURANCE CP (PRA): Free Stock Analysis
SHIP FIN INTL (SFL): Free Stock Analysis
WESTLAKE CHEM (WLK): Free Stock Analysis
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