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Fluor Corporation (FLR - Analyst Report) is set to report second quarter 2013 results on Aug 1. Last quarter it posted a 6.3% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors

Fluor Corporation is benefiting from the surge in shale gas revolution in North America. It is generating promising opportunities for Liquefied Natural Gas (LNG) and ethylene projects. Fluor is benefiting from this potential in LNG market and has been receiving steady inflow of orders from the world’s largest refineries and oil & gas facilities. The company’s order pipeline primarily comprises front-end engineering and design (FEED) analysis of key projects. Recently, the company has procured a FEED contract for Sasol’s Lake Charles Chemical Complex situated in Louisiana. This facility, once completed, will be a world-class ethane cracker and associated derivative chemicals facility.

Earnings Whispers?

Our proven model does not conclusively show that Fluor Corporation is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP (Read: Zacks Earnings ESP: A Better Method):  That is because the Most Accurate estimate stands at $1.00 while the Zacks Consensus Estimate is lower at $1.01. That is a difference of -0.99%.

Zacks  Rank #4 (Sell): Fluor Corporation’s Zacks Rank #4 (Sell) lowers the predictive power of ESP because the Zacks Rank #4 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

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:  

Barnes group Inc. (B - Snapshot Report) - Earnings ESP of +1.92% and Zacks Rank #2 (Buy).

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

IDEX Corporation(IEX - Analyst Report) - Earnings ESP of +1.37% and Zacks Rank #2 (Buy)

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