Intel Corp. (INTC - Analyst Report) is set to report third-quarter 2013 results on Oct 15. Last quarter, it posted a 3% negative surprise. Let’s see how things are shaping up for this announcement.
Growth Factors This Past Quarter
The company’s second-quarter earnings were below the Zacks Consensus Estimate by a penny. Revenues were up sequentially but down from the year-ago quarter. Weaker-than-expected PC demand stemming from tablet cannibalization and restrained consumer buying due to tighter budgets continued to impact results in the last quarter.
The second quarter was strong for Intel in terms of sequential margin growth. This was mainly attributable to higher volumes and qualification of Haswell products for sale.
Our proven model does not conclusively show that Intel will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 53 cents. Hence, the difference is 0.00%.
Zacks Rank #3 (Hold): Intel’s Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.
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 Stocks to Consider
You could consider other stocks with a positive earnings ESP and Zacks Rank #1, 2 or 3 such as:
Jarden Corp. (JAH - Snapshot Report), with Earnings ESP of +1.00% and a Zacks Rank #1 (Strong Buy).
Micron Technology Inc. (MU - Analyst Report), with Earnings ESP of +4.35% and a Zacks Rank #1 (Strong Buy).
Lithia Motors Inc. (LAD - Snapshot Report), with Earnings ESP of +2.73% and a Zacks Rank #2 (Buy).