) is set to report fourth-quarter 2013 results on Feb 19. Last
quarter, it posted 15.0% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
Garmin's third-quarter earnings were above the Zacks Consensus
Estimate driven by strong growth in new products that are
increasingly diversifying its business. However, revenues of
$643.6 million were down 7.6% sequentially and 4.3% year over
Gross margins also decreased 30 basis points (bps)
sequentially but were up 140 bps year over year. The
year-over-year increase was due to a favorable segment mix. Also,
the amortization of previously deferred revenues helped margins.
The operating margin shrank 80 bps sequentially and 20 bps year
over year to 23.6% in the last quarter.
Our proven model does not conclusively show that Garmin 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 61 cents. Hence, the difference is 0.00%.
Garmin has a Zacks Rank #1 (Strong Buy) 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
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
GARMIN LTD (GRMN): Free Stock Analysis Report
PROASSURANCE CP (PRA): Free Stock Analysis
SHIP FIN INTL (SFL): Free Stock Analysis
WESTLAKE CHEM (WLK): Free Stock Analysis
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