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URS Corp.(URS - Analyst Report) is set to report third quarter 2013 results on Nov 5. Last quarter it posted a 6.2% negative surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

During the third quarter, URS Corp. received a couple of contracts and contract extensions. Most recently, the company received two indefinite delivery/indefinite quantity, multiple-award pillar contracts by the Space and Naval Warfare Systems Center Atlantic. This apart, the company announced some Capital Allocation priorities that include dividend payments and share repurchases, which are to be funded by free cash flow. This move to return cash to its shareholders and reduce debt is in line with URS’ long-term opportunities to maintain its investment grade credit rating.

Earnings Whispers?

Our proven model does not conclusively show that URS Corp. is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP:  That is because the Most Accurate estimate stands at $1.19 while the Zacks Consensus Estimate is higher at $1.20. That is a difference of -0.83%.

Zacks Rank #3 (Hold): URS Corp’s Zacks  Rank #3 lowers the predictive power of ESP because the Zacks  Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks of #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:  

Xylem Inc. (XYL - Analyst Report), Earnings ESP of +6.12% and Zacks Rank #1 (Strong Buy)

DST Systems Inc. (DST - Analyst Report), Earnings ESP of +1.54% and Zacks  Rank #1 (Strong Buy)

Flowserve Corp. (FLS - Analyst Report), Earnings ESP of +0.95%and Zacks  Rank #2 (Buy)

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