) is set to report its third quarter 2013 results on Jul 25. In
the prior quarter, the company posted a 7% positive earnings
surprise. Let's see how things are shaping up for this
Growth Factors this Past Quarter
Microsemi reported a disappointing second quarter due to
weakness in the communications, aerospace and industrial markets.
Although Microsemi has benefited from growing electronic content
in the defense & security space, lower Department of Defense
(DoD) spending due to U.S. military budget constraints impacted
its top line.
However, Microsemi's gross margin improved due to growing
sales of new higher-margin products and a reduction in operating
costs due to headcount reduction. Management is also positive
that demand in the communications market may improve and believes
that key customers such as AT&T will generate steady
The Zacks Consensus Estimate for the third quarter stands at
38 cents per share while that for fiscal 2013 stands at
Microsemi posted a positive surprise in the second quarter of
2013 and negative surprises in the first and fourth quarters of
2012. This led to an average positive surprise of 0.74% for the
preceding four quarters.
No estimate revisions were noticed for both the third quarter
and fiscal 2013 over the past 30 days. As a result, the Zacks
Consensus Estimate has remained unchanged for both the
The chances of a big surprise are unlikely given the lack of
catalysts during the quarter. The stock carries a Zacks Rank #3
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
Our model states that a stock needs to have both a positive
Zacks Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, #2 or #3 to beat earnings estimates. You
could, therefore, consider the following stocks as our model
shows that they have the right combination of elements to post an
earnings beat this quarter:
), Earnings ESP of +8.33% and a Zacks Rank #2 (Buy).
Huron Consulting Group Inc.
), Earnings ESP of +1.64% and a Zacks Rank #2 (Buy).
), Earnings ESP of +1.96% and a Zacks Rank #2 (Buy).
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MICROSEMI CORP (MSCC): Free Stock Analysis
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