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We expect Qualcomm Inc. (QCOM - Analyst Report), the world’s leading mobile chipset developer, to beat expectations when it reports its first-quarter 2013 results after the market closes on Jul 24, 2013.

Why a Likely Positive Surprise?

Our proven model shows that QCOM is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.10%. This is a meaningful and leading indicator of a likely positive earnings surprise.

Zacks Rank #3 (Hold): QCOM currently has a Zacks Rank #3. Note that the stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly higher chance of beating the earnings.  

The combination of QCOM’s Zacks Rank #3 (Hold) and +1.10% ESP makes us confident of a positive earnings beat on Jul 24, 2013.

What is Driving the Better-Than-Expected Earnings?

Higher adoption of smartphones and tablets coupled with increased deployment of 3G/4GLTE networks may drive mobile chipset sale, going forward. as most smartphone manufacturing companies are continuously using Qualcomm’s Snapdragon processors. Moreover, the launch of industry hit new Snapdragon quad core processors, which support better graphics and enhance battery life, will further act as catalysts for growth,   moving ahead.   

Other Stocks to Consider

Other companies you may consider on the basis of our model, which have the right combination of elements to post an earnings beat this quarter are as follows:

InterDigital, Inc. (IDCC - Snapshot Report) has an Earnings ESP of +27.78% and carries a Zacks Rank #3 (Hold).

Leap Wireless International Inc. has an Earnings ESP of +3.00% and carries a Zacks Rank #3 (Hold).

Apple Inc. (AAPL - Analyst Report) has an Earnings ESP of +2.19% and carries a Zacks Rank #3 (Hold).
 

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