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We expect McGraw Hill Financials, Inc. (MHFI - Analyst Report), a financial information provider, to beat expectations when it reports third-quarter 2013 results on Oct 22, 2013.

Why a Likely Positive Surprise?

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

Positive Zacks ESP: McGraw Hill currently has an Earnings ESP of +1.28%. This is because the Most Accurate Estimate stands at 79 cents, while the Zacks Consensus Estimate is pegged at 78 cents.

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

The combination of McGraw Hill‘s Zacks Rank #2 (Buy) and +1.28% ESP makes us very confident regarding a positive earnings beat on Oct 22.

What is Driving the Better-than-Expected Earnings?     

McGraw Hill’s strategic investment programs, effective capital allocation, impressive Q2 results on the back of strong performance by S&P Ratings and S&P Dow Jones Indices business and its share repurchases make us confident on the stock outperformance in the third quarter. The positive trend is seen in the trailing four-quarter average surprise of 9.0%.

Stocks that Warrant a Look

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:

SouFun Holdings Ltd. (SFUN - Snapshot Report), Earnings ESP of +1.16% and a Zacks Rank #1 (Strong Buy).

Exponent, Inc. (EXPO - Snapshot Report), Earnings ESP of +1.79% and a Zacks Rank #1 (Strong Buy).

Verisk Analytics, Inc. (VRSK - Snapshot Report), Earnings ESP of +5.00% and a Zacks Rank #3 (Hold).

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