Back to top

Analyst Blog

Pall Corporation is set to report first quarter 2014 results on Nov 26. Last quarter it posted a 2.27% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Macroeconomic headwinds during the quarter are expected to be fully offset by the improved operational execution and favorable impact from the structural cost actions. The company is expected to have a positive fiscal 2014 driven by recovering economic conditions and the strategic initiatives taken by the company including increased investments in R&D and innovation. In addition, the company has also taken some cost reduction initiatives with a focus on the Industrial segment to improve its performance.   

Earnings Whispers?

Our proven model does not conclusively show that Pall 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 at68 cents while the Zacks Consensus Estimate is higher at 69 cents. That is a difference of -1.45%.

Zacks Rank #2 (Buy). Pall’s Zacks Rank #2 lowers the predictive power of ESP because the Zacks Rank#2 when combined with a negative 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:  

Xylem Inc. , Earnings ESP of 4.00% and Zacks Rank #1 (Strong Buy)

Almo Group Inc. , Earnings ESP of 2.27% and Zacks Rank #2

Donaldson Company Inc. , Earnings ESP of 2.70% and Zacks Rank #2

Please login to Zacks.com or register to post a comment.