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Analog Devices, Inc. (ADI - Analyst Report) is set to report fourth-quarter 2013 results on Nov 26. Last quarter, it posted a 5.6% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Analog’s fiscal third-quarter earnings exceeded the Zacks Consensus Estimate, driven by strong revenue growth coupled with better gross margins and solid expense management. Additionally, revenues were up sequentially driven by strength in communications and industrial segments. Analog reported operating margin of 39.0%, which was down 20 basis points from the year-ago quarter.

Analog provided a modest outlook for the fourth quarter, with revenues expected in the range of $675 million to $700 million, up 2.0% sequentially. The company estimates gross margin to be 65.0%, operating expenses to increase by approximately 1%, tax rate in the range of 14%–15% and earnings per share within 55 cents–61 cents.

Earnings Whispers?

Our proven model does not conclusively show that Analog Devices 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.

Zacks ESP:  Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 58 cents. Hence, the difference is 0.00%.

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

You could consider other stocks with a positive earnings ESP and a Zacks Rank #1, 2 or 3 such as:

The Kroger Co. (KR - Analyst Report), with Earnings ESP of +1.89% and a Zacks Rank #2 (Buy).

Five Below, Inc. (FIVE - Snapshot Report), with Earnings ESP of +25.00% and a Zacks Rank #2 (Buy).

United Natural Foods, Inc. (UNFI - Analyst Report), with Earnings ESP of +3.70% and a Zacks Rank #2 (Buy).

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