Will iRobot (IRBT) Beat Q2 Earnings Estimates? - Analyst Blog

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Robot manufacturer iRobot Corporation ( IRBT ) is scheduled to release second-quarter 2014 results on Jul 22 after the market closes. The company had delivered a positive earnings surprise of 12.5% in the preceding quarter. Let's see how things are shaping up prior to this announcement.

Factors to Consider

Strong demand in the Home Robots segment has been aiding iRobot's growth momentum in the past. The company continues to launch various products in order to gain higher market share. iRobot unveiled its floor cleaning robot, Scooba 450 last January and prior to that, Roomba 880 in Nov 2013.  Both products, meeting with immense success, are expected to augment revenues in the future.

The company has also been gaining on its international operations, which are expected to grow in the coming quarters. Moreover, iRobot has been making efforts to increase shareholders' values. In April this year, the company announced a stock repurchase plan of $50 million, which spans from May 1, 2014 to Apr 30, 2015.  

Earnings Whispers

Our proven model does not conclusively show that iRobot 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 we will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This indicates in-line earnings for the stock.

Zacks Rank: iRobot's Zacks Rank #3 (Hold), when combined with a 0.00% ESP makes surprise predictions 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 a negative estimate revision momentum.

Other Stocks to Consider

Here are some companies in the industry that investors may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Caterpillar Inc. ( CAT ), Earnings ESP of +3.33% and a Zacks Rank #2 (Buy).

Lincoln Electric Holdings Inc. ( LECO ), Earnings ESP of +1.10% and a Zacks Rank #3.

Kennametal Inc. ( KMT ), Earnings ESP of +1.12% and a Zacks Rank #3.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: LECO , CAT , KMT , IRBT

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