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Flash storage solutions provider SanDisk Corp. (SNDK - Analyst Report) is set to report third-quarter 2013 results on Oct 16. Last quarter, it posted a 29.6% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

SanDisk posted solid second-quarter results with both its top and bottom lines surpassing the Zacks Consensus Estimate. Revenues from original equipment manufacturers (OEMs) and Retail were strong, aided by higher mobile embedded and SSD sales. SanDisk also provided an encouraging 2013 guidance, citing growing demand for solid disk drives (SSDs) and ramp of its 19-nm technology.

Additionally, the company recently introduced an enhanced version of iNAND Extreme flash drive, compatible with Intel’s (INTC - Analyst Report) new Atom Z3000 processors, also known as ‘Bay Trail’ for tablets.

We believe that the synergies with Intel’s Atom processors and its greater adoption rate will provide better stability to SanDisk’s revenue stream. We are also positive about SanDisk’s focus on mobile-embedded products (as several new smartphones and tablets, Ultrabooks and other end-client PCs running on SSDs are slated for launch).

Earnings Whispers?

Our proven model does not conclusively show that SanDisk 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 $1.22. Hence, the difference is 0.00%.

Zacks Rank #3 (Hold): SanDisk’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

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: 

Cirrus Logic Inc. (CRUS - Snapshot Report), with Earnings ESP of +7.69% and a Zacks Rank #1 (Strong Buy).

Plexus Corp. (PLXS - Analyst Report), with Earnings ESP of +1.49% and a Zacks Rank #1 (Strong Buy).

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