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Biogen Idec (BIIB - Analyst Report) is scheduled to report third quarter 2013 earnings before the opening bell on Oct 28, 2013. We expect the company to beat expectations in the third quarter.

Why a Likely Positive Surprise?

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

Positive Zacks ESP: The Earnings ESP (Expected Surprise Prediction), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.40%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.

Zacks Rank #3 (Hold): Note that stocks with a Zacks Rank #1, 2 and 3 have a significantly higher chance of beating earnings estimates. 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.

The combination of Biogen’s Zacks Rank #3 and an ESP of +1.40% makes us confident of an earnings beat on Oct 28.

Factors at Play

Biogen holds a strong position in the multiple sclerosis market. While multiple sclerosis product, Tysabri, could exceed expectations in the third quarter, the launch of Biogen’s new multiple sclerosis product Tecfidera, has also been impressive. New scrip volume for Tecfidera should remain healthy.

Meanwhile, Avonex, Biogen’s lead multiple sclerosis product should continue performing well. Moreover, Biogen’s share of oncology product, Rituxan, could also be higher-than-expected. Earlier this month, Roche (RHHBY - Analyst Report) reported that Rituxan worldwide sales in the third quarter of 2013 were CHF 1,805 million, up 12% from the year-ago period.

Other Stocks to Consider

Biogen is not the only company looking up this earnings season. We also see likely earnings beat coming from these companies:

Actavis, Inc. (ACT - Analyst Report) has Earnings ESP of +0.48% and holds a Zacks Rank #2 (Buy). Actavis will be reporting third quarter earnings on Oct 29 before the market opens.

Mylan (MYL - Analyst Report) has Earnings ESP of +1.28% and holds a Zacks Rank #3. Mylan will be reporting third quarter earnings on Oct 31 before the market opens.

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