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Infinera (INFN) to Report Q4 Earnings: Another Beat in Store?

Infinera Corp.INFN is slated to release its fourth-quarter 2015 results on Feb 11, after market close.

Last quarter, Infinera had delivered a solid positive earnings surprise of 70.00%. Moreover, the company's earnings have surpassed the Zacks Consensus Estimate in all of the previous four quarters, with an average beat of 67.50%. Let's see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that the company is likely to beat the Zacks Consensus Estimate because it has the right combination of two key ingredients.

Zacks ESP: Infinera has an earnings ESP of +7.14%. This is because the Most Accurate estimate is 15 cents, higher than the Zacks Consensus Estimate of 14 cents. This is a meaningful and leading indicator of a likely positive earnings surprise.

Zacks Rank: Infinera has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Infinera's Zacks Rank #3 and +7.14% ESP makes us confident of an earnings beat at the company.

What is Driving the Better-than-Expected Earnings?

In Nov 2015, Infinera's TM series was selected by SEACOM for the latter's new metro wavelength division multiplexing (WDM) networks in South Africa and East Africa. The TM series is known for its flexibility and scalability for packet-optical networking. This highlights the significance of its expansion into the metro market, which may be a value driver for the firm, going ahead.

Moreover, the company has received the MEF 100 gigabit (100G) Carrier Ethernet 2.0 (CE 2.0) certification program. By achieving such status, Infinera is now positioned as a global packet-optical transport leader that can deliver differentiated services to its clients, which in turn boosts its chances to achieve higher revenues.

Other Stocks to Consider

Infinera is not the only company looking up this earnings season. Here are some other firms that investors may consider as our model shows these too have the right combination of elements to post an earnings beat this quarter.

ARRIS International plc ARRS , which has an earnings ESP of +4.88% and a Zacks Rank #1

Vocera Communications, Inc. VCRA , which has an earnings ESP of +6.67% and a Zacks Rank #1

NetEase, Inc. NTES , which has an earnings ESP of +0.52% and a Zacks Rank #2

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INFINERA CORP (INFN): Free Stock Analysis Report

NETEASE INC (NTES): Free Stock Analysis Report

ARRIS INTL PLC (ARRS): Free Stock Analysis Report

VOCERA COMM INC (VCRA): Free Stock Analysis Report

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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 Nasdaq, Inc.


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

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