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Actavis, Inc. (ACT - Analyst Report) is scheduled to report second quarter 2013 earnings before the opening bell on Jul 25, 2013. We expect the company to beat expectations in the second quarter.

Why a Likely Positive Surprise?

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

Positive Zacks ESP (Expected Surprise Prediction): This is because the Most Accurate Estimate stands at $2.02 while the Zacks Consensus Estimate is lower at $1.99 per share. This results in a difference of +1.51%.

Zacks Rank #2 (Buy): Note that stocks with a Zacks Rank #1, 2 and 3 have a significantly higher chance of beating earnings estimates. 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.

The combination of Actavis’ Zacks Rank #2 and an ESP of +1.51% makes us confident of an earnings beat on Jul 25.

What is Driving the Better-than-Expected Earnings?

Actavis is a leading specialty pharmaceutical company engaged in the development, manufacturing, marketing, sale and distribution of generic, branded generic, brand, biosimilar and over-the-counter (OTC) pharmaceutical products.

Actavis, the third largest generics pharma company in the world, develops, manufactures and sells generic pharmaceutical products. Sales should benefit from the launch of generic versions of Lidoderm, Zovirax, Zometa and Suboxone.

While Actavis continues to work on driving generic product sales, the company is also working on strengthening its branded product portfolio. The company’s branded product portfolio consists of more than 40 product families including Androderm, Kadian, Crinone, and Generess, among others. Moreover, new products like Rapaflo, Gelnique and Trelstar should help boost revenues.

Other Stocks to Consider

Actavis is not the only company looking up this earnings season. We also see likely earnings beat coming from these companies:

Biogen Idec. (BIIB - Analyst Report) has Earnings ESP of +2.19% and holds a Zacks Rank #3 (Hold). Biogen will be reporting second quarter earnings on Jul 25 before the market opens.

Momenta Pharmaceuticals Inc. (MNTA - Snapshot Report) has Earnings ESP of +2.13% and holds a Zacks Rank #2. Momenta will be reporting second quarter earnings on Aug 1 before the market opens.

Teva Pharmaceutical Industries Limited (TEVA - Analyst Report) has Earnings ESP of +0.85% and holds a Zacks Rank #3. Teva will be reporting second quarter earnings on Aug 1.

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