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We expect industrial goods manufacturer  Precision Castparts Corp. (PCP - Analyst Report) to beat earnings expectations when it reports first quarter fiscal 2013 results on Jul 25.

Why a Likely Positive Surprise?

Our indigenous Zacks methodology shows that Precision is likely to beat earnings with the right combination of two key ingredients.

Positive Zacks ESP: Earnings Surprise Prediction or ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is currently pegged at 0.35% for Precision. This implies a likely positive earnings surprise for the stock.

Zacks Rank #2 (Buy): Stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher probability of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement. 

With a Zacks Rank #2 (Buy) and an ESP of 0.35%, Precision is strong contender for earnings beat this quarter.

What is Driving the Better than Expected Earnings?

Shares of this leading manufacturer of complex metal components and products have been steadily riding high and attained multiple 52-week new highs in the last one year.

Precision is experiencing significant growth in its Aerospace and Forged segment in 2013. In addition, demand in industrial gas turbine (IGT) looks encouraging. The company will likely benefit from the growing demand of Boeing 787, as it is one primary supplier of engine components and raw materials for 787s . The company is continually focusing on expanding its product lines and markets.

Furthermore, Precision has a proven track record of increasing market share through acquisitions and developing new growth opportunities. The company completed eight acquisitions in fiscal 2012. Moving forward, the company is expected to benefit from the strong free cash flow and enormous funds available to boost its organic and inorganic growth.

Given management’s stellar acquisition track record, new product line and robust free cash flow generation, investors can look forward to improved results in the first quarter of fiscal 2013.

Other Stocks to Consider

Precision is not the only firm looking up this earnings season. We also see likely earnings beats coming from these three industry peers as well:

AO Smith Corp. (AOS - Snapshot Report)Earnings ESP of +2.33% and a Zacks Rank #2 (Buy)

Gardner Denver Inc. Earnings ESP of +3.18% and a Zacks Rank #2 (Buy)

Lindsay Corporation (LNN - Analyst Report) Earnings ESP of +2.13% and a Zacks Rank #2 (Buy).

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