Applied Materials, Inc.
) is set to report third quarter 2013 results on Aug 15. Last
quarter, it posted a 23% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
The company's second-quarter earnings were above the Zacks
Consensus Estimate by 4 cents driven by higher volumes and
effective cost control measures. Revenues jumped approximately
25% sequentially due to increased demand in the SSG and Display
The second quarter was strong for Applied in terms of margin
growth. This was mainly attributable to higher volumes and lower
Our proven model does not conclusively show that Applied
Materials will 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 #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%.
Zacks Rank #3 (Hold):
Applied'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 Zacks Rank #1, #2 or #3 such as:
), with an ESP of +42.86% and a Zacks Rank #1 (Strong Buy)
), with Earnings ESP of +28.57% and a Zacks Rank #2 (Buy)
), Earnings ESP of +5.26% and a Zacks Rank #3(Hold)
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