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NetApp Inc. (NTAP - Analyst Report) is set to report second-quarter 2014 results on Nov 13. The company delivered a positive earnings surprise of 8.82% in the first quarter. Let’s see how things are shaping up for this announcement.

Factors This Past Quarter

NetApp reported mixed first-quarter results wherein the bottom line beat the Zacks Consensus Estimate but the top line lagged the same. Although NetApp’s year-over-year comparisons were favorable, the company reported sequential declines in revenues. Moreover, operating expenses increased sequentially. The year-over-year growth was primarily driven by higher branded revenues while original equipment manufacturer (OEM) revenues declined.

Moreover, weak demand environment and competition from EMC Corp.’s (EMC - Analyst Report) storage platform remain the concerns for the company.

Earnings Whispers?

Our proven model does not conclusively show that NetApp 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.

Negative Zacks ESP:  The Most Accurate estimate stands at 42 cents, while the Zacks Consensus Estimate is higher at 48 cents. That is a difference of -12.5%.

Zacks Rank #4 (Sell): 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: 

Best Buy Co., Inc. (BBY - Analyst Report), with Earnings ESP of +18.18% and a Zacks Rank #1 (Strong Buy).

Dish Network Corp. (DISH - Analyst Report), with Earnings ESP of +4.76% and a Zacks Rank #2 (Buy).

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