Juniper Networks, Inc. ( JNPR ) is set to report fourth-quarter 2014 results on Jan 27. Last quarter, it posted a negative surprise of 15.4%. Let us see how things are shaping up for this announcement.
Factors to Consider
Last quarter, Juniper reported tepid results with the bottom line missing the Zacks Consensus Estimate but the top line matching the same. The company also provided a weak fourth-quarter revenue guidance.
Though the company's product launches, cost reduction initiatives and improved execution are encouraging, the charges related to the company's restructuring initiatives are expected to impact the profitability of the quarter to be reported. Competition from Cisco ( CSCO ) and F5 Networks also remains a concern. Delays in large projects also remain an overhang on the stock.
Our proven model does not conclusively show that Juniper is likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:
Zacks ESP: Juniper has an Earnings ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 20 cents per share.
Zacks Rank: Juniper'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 negative estimate revisions momentum.
Stocks to Consider
Here are some companies which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Apple Inc. ( AAPL ), with an Earnings ESP of +0.78% and a Zacks Rank #1 (Strong Buy).
Western Digital Corp. ( WDC ), with an Earnings ESP of +1.43% and a Zacks Rank #3.