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Linear Technology Corp. (LLTC - Analyst Report) is set to report second-quarter fiscal 2014 results on Jan 14. Last quarter, it posted a 4.4% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

The company’s first-quarter earnings exceeded the Zacks Consensus Estimate by a couple of cents due to higher volumes. Revenues of $340.4 million were up 1.6% year over year and at the higher end of management’s guidance range, led by improved sales in the automotive and industrial markets.

Also, the first quarter was strong for Linear Technology in terms of margin growth. This was mainly due to favorable mix and lower-than-expected expenses.

However, the company provided cautious second-quarter guidance, with revenues expected to be flat to down 4% sequentially. Also, the budgeting stalemate at the Federal Government level could hurt results, indicating weak revenues in the upcoming quarter.

Earnings Whispers?

Our proven model does not conclusively show that Linear Technology 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 44 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:

Helmerich & Payne, Inc. (HP - Analyst Report), with Earnings ESP of +4.17% and a Zacks Rank #1 (Strong Buy).

Western Digital Corporation (WDC - Analyst Report), with Earnings ESP of +1.93% and a Zacks Rank #.

First Interstate Bancsystem Inc. (FIBK - Snapshot Report), with Earnings ESP of +6.52% and a Zacks Rank #1.

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