Credit: Shutterstock photoHubbell Inc.HUB.B is set to report third-quarter 2015 results on Oct 22. Last quarter, the company posted a positive earnings surprise of 15.56%. Moreover, it has posted positive earnings surprises in all the trailing four quarters, with an average surprise of 7.44%.
Let us see how things are shaping up for this announcement.
Factors to Consider
Hubbell reported mixed second-quarter results with earnings surpassing the Zacks Consensus Estimate but revenues missing the same.
The cost reduction initiatives undertaken by Hubbell are beginning to show results. The company has exited seven facilities and initiated other actions, which are expected to further improve the company's bottom line. These initiatives, along with acquisitions, should supplement market growth for the company.
However, an unfavorable foreign exchange rate is expected to remain a headwind. The company plans to offset these obstacles through productivity initiatives, restructuring actions, and capital deployment for both acquisitions and share repurchases.
Earnings Whispers
Our proven model does not conclusively show that Hubbell will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: While the Most Accurate estimate stands at $1.30, the Zacks Consensus Estimate is $1.31. Hence, the difference is -0.76%.
Zacks Rank: Hubbell has a Zacks Rank #4 (Sell).
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies which you may consider instead, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Amgen Inc. AMGN , with an Earnings ESP of +1.27% and a Zacks Rank #1.
Anika Therapeutics Inc. ANIK , with an Earnings ESP of +2.94% and a Zacks Rank #1.
SkyWest Inc. SKYW , with an Earnings ESP of +4.55% and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
HUBBELL INC -B (HUB.B): Free Stock Analysis Report
AMGEN INC (AMGN): Free Stock Analysis Report
SKYWEST INC (SKYW): Free Stock Analysis Report
ANIKA THERAPEUT (ANIK): Free Stock Analysis Report
To read this article on Zacks.com click here.
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.
