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Rockwell Collins Inc. (COL - Analyst Report) is set to report its fiscal third quarter 2013 results on Jul 19 before the market opens. Last quarter, the company posted a 0.86% positive surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

Rockwell Collins is the foremost global supplier of communications and avionics equipment for both commercial and military customers. Its balanced exposure to both types of customers allows the company to use government funding to develop products for the dual-end market. Going forward, the company’s cash deployment strategy would continue to attract investors.

During the quarter, the company was a beneficiary of a number of contracts from the Department of Defense (DoD). We however note that the contracts were not sizeable. Like its peers, the company is also subject to the U.S. government’s delayed funding authorizations and political uncertainty. Budget cuts from sequestration have reduced the number of contracts awarded by the DoD.

Earnings Whispers?

Our proven model does not conclusively show that Rockwell is likely to beat earnings this quarter. That is because a stock needs to have both a positive Zacks earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP: The Zacks ESP is 0.0%.

Zacks Rank #3 (Hold): Rockwell Collins carries a Zacks Rank #3 (Hold). However, the Zacks Rank #3 when combined with a 0.0% ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and 5 (Sell-rated stocks) going into the earnings announcement.

Other Stocks to Consider

Here are some other companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Orbital Sciences Corp. (ORB - Snapshot Report), with Earnings ESP of +8.70% and a Zacks Rank #1 (Strong Buy).

Spirit AeroSystems Holdings, Inc. (SPR - Snapshot Report), with Earnings ESP of +4.00% and a Zacks Rank #2 (Buy).

Raytheon Company (RTN - Analyst Report), with Earnings ESP of +1.54% and a Zacks Rank #3 (Hold).

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