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Maxim Integrated Products (MXIM - Analyst Report) is set to report first quarter 2014 results on Oct 24. Last quarter it posted a 6.38% negative surprise. Let’s see how things are shaping up for this announcement.
Growth Factors this Past Quarter

The company’s revenues missed management’s guided range of $610-$640 million in the fourth quarter of 2013, but were up both sequentially and on a year-over-year basis. The increase was driven by strong demand in the automotive, smart meter and medical end markets. However, gross margin declined due to lower factory utilization and higher inventory reserves.

For the first quarter of 2014, Maxim expects to generate GAAP EPS of 34 cents to 38 cents and adjusted EPS of 37 cents to 41 cents. Management expects the introduction of highly integrated solutions across its broad range of technologies to help drive network performance going forward.

Earnings Whispers?

Our proven model does not conclusively show that Maxim is likely to beat earnings because it does not have the right combination of two key ingredients.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 48 cents. Hence, the difference is 0.0%.

Zacks Rank #2 (Buy): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. However, the combination of Maxim’s Zacks Rank # 2 (Buy) and 0.0% Earnings 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 they have the right combination of elements to post an earnings beat this quarter:  

SanDisk Corporation (SNDK - Analyst Report), Earnings ESP of +2.84% and a Zacks Rank #1 (Strong Buy).

Asml Holding NV (ASML - Snapshot Report), Earnings ESP of +4.17% and Zacks Rank #3 (Hold).   

Jarden Corp (JAH - Snapshot Report), Earnings ESP of +2.00% and a Zacks Rank #1 (Strong Buy).

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