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Western Digital Corp. (WDC - Analyst Report)is slated to report its fourth-quarter 2013 results on Jul 24, 2013. In the last quarter, it posted a 17.32% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

The company delivered decent first-quarter 2013 results, with earnings per share of $2.10 beating the Zacks Consensus Estimate of $1.79. The company also witnessed substantial increase in revenues, although margins shrank, as increased innovation resulted in higher R&D expenses.

Western Digital has benefited from the secular growth of digital data and its growing exposure to the small and medium business segment. The company is rolling out storage devices to attract more customers.

Earnings Whispers?                                       

Positive Zacks ESP:Earnings 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 at +0.56%. This is meaningful and a leading indicator for a likely positive earnings surprise for shares.

Zacks Rank #2 (Buy):The combination of Western Digital’s’ Zacks Rank #2 (Buy) and +0.56% ESP makes us very confident about a positive earnings beat on Jul 24.

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.

Other Stock to Consider

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

  • Zynga Inc.(ZNGA - Snapshot Report), which has Earnings ESP of +14.29% and carries a Zacks Rank #1 (Strong Buy)
  • Apple Inc. (AAPL - Analyst Report), which has Earnings ESP of +2.6% and carries a Zacks Rank #3 (Hold)
  • Computer Sciences Corporation (CSC - Analyst Report), which has Earnings ESP of +4.69% and carries a Zacks Rank #2 (Hold)

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