Foster Wheeler AG
) is set to report second quarter 2014 results on Aug 9. Last
quarter it posted a 6.7% negative surprise. Let's see how things
are shaping up for this announcement.
Factors this Past Quarter
Overall, Foster Wheeler witnessed lower orders in its two
operating segments. In the past quarter, the Global Engineering
and Construction segment reported 30% decline in new order
bookings. The orders mainly comprised many small and medium-sized
contracts. Further, the segment was also impacted by loss
arising from mark-to-market foreign currency losses. In addition,
the Global Power Group also reported a 23% decline in new orders,
which was attributable to a lack of boiler orders.
Our proven model does not conclusively show that Foster
Wheeler is likely to beat earnings this quarter. That is because
a stock needs to have both a positive Earnings ESP and a Zacks
Rank of #1, 2 or 3 for this to happen. That is not the case here
as you will see below.
Negative Zacks ESP
Zacks Earnings ESP: A Better Method
That is because the Most Accurate Estimate stands at 30 cents
while the Zacks Consensus Estimate is lower at 33 cents. That is
a difference of -9.09%.
Zacks Rank #3 (Hold):
Foster Wheeler's Zacks Rank #3 (Hold) lowers the predictive
power of ESP because the Zacks Rank #3 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 seeing 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:
Clayton William Energy, Inc.
), Earnings ESP of 10.6% and Zacks Rank #1 (Strong Buy)
Carrizo Oil & Gas Inc
), Earnings ESP of 3.64% and Zacks Rank #2 (Buy)
Memorial production Partners LP
), Earnings ESP of 4.76% and Zacks Rank #2 (Buy)
CARRIZO OIL&GAS (CRZO): Free Stock Analysis
WILLIAMS(C)ENGY (CWEI): Free Stock Analysis
FOSTER WHELR AG (FWLT): Free Stock Analysis
MEMORIAL PRODUC (MEMP): Free Stock Analysis
To read this article on Zacks.com click here.