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CA Inc. (CA - Analyst Report) is set to report third-quarter 2014 results on Jan 21. Last quarter, the company posted a positive earnings surprise of 22.06%. Let  us see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Although CA reported better-than-expected second-quarter results, the year-over-year comparison for the top line was down. Nonetheless, recent news flows related to CA Nimsoft Monitor Snap, a feature-rich free utility version of its popular CA Nimsoft Monitor solution is gaining traction and has garnered 5000 customers in the first 100 days remain a positive factor for the current quarter. CA’s association with International Business Machines (IBM - Analyst Report) to provide cloud-based offering to clients across dynamic data centers and platforms is also a positive, going forward.

Additionally, CA’s cloud expansion and restructuring initiatives remain on track. A decent renewal rate, modest cash position and share repurchase activities also appear encouraging. The company’s endeavor to return cash to its investors in the form of dividend payments also boosts investors’ confidence.

Moreover, CA is gaining traction in the Mainframe Solutions and Services segments. We believe that CA’s mainframe revenues are expected to be aided by higher sales of new products and mainframe capacity while Services revenues will receive a boost from higher professional services engagements.

Earnings Whispers?

Our proven model does not conclusively show that CA 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 68 cents. Hence, the difference is 0.00%.

Zacks Rank: CA’s Zacks Rank #3 (Hold), when combined with a 0.00% 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 that they have the right combination of elements to post an earnings beat this quarter:

Cirrus Logic (CRUS - Snapshot Report), with Earnings ESP of +4.41% and a Zacks Rank #1 (Strong Buy).

Seagate Technology (STX - Analyst Report), with Earnings ESP of +1.44% and a Zacks Rank #2 (Buy).

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