Trimble Navigation LimitedTRMB is slated to report second-quarter 2015 results on Aug 4. In the last quarter, the company posted a negative earnings surprise of 7.69%.
Factors to Consider
Trimble reported weak first-quarter 2015 results with both the top line and the bottom line missing the respective Zacks Consensus Estimate.
Going forward, management expects the real estate and workplace solutions business, which includes Manhattan Software and E&C; and construction supply and Field Services management, which are in Mobile Solutions currently, to create strong growth opportunities. These businesses are expected to demonstrate meaningful progress in 2015.
During the year, the construction supply business is expected to strengthen backed by the improving U.S. economy and a stronger product portfolio. The solid orders pipeline of the Field Solutions & the Mobile Solutions segments should lead to an improvement in the second half of the year and a stronger 2016.
Several strategic initiatives to boost revenues were also undertaken. This includes the Beijing new airport contract, a multi-year alliance with Paccar, the manufacturer of trucks, and collaboration with Microsoft MSFT to develop a new generation of tools integrated with Windows HoloLens holographic platform on Windows 10.
Trimble is witnessing improving trends in the construction market. The company's initiatives, such as lowering cost structure, strategic acquisitions, increasing adoption of technology in the agricultural market, product enhancements and international expansion appear to be encouraging.
Our proven model does not conclusively show that Trimble is likely to beat earnings this quarter as it does not have the right combination of two key ingredients. 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 : Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 24 cents. Hence, the difference is 0.00%.
Zacks Rank : Trimble currently 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 That Warrant a Look
Here are some companies that you may want to consider as our model shows these have the right combination of elements to post an earnings beat:
Albemarle Corp. ALB ,with an Earnings ESP of +2.44% and a Zacks Rank #1.
Ashford Hospitality Trust, Inc. AHT , with an Earnings ESP of +4.35% and a Zacks Rank #1.
Jack in the Box inc. JACK , with an Earnings ESP of +2.74% and a Zacks Rank #1.