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JDS Uniphase (JDSU - Analyst Report), a leading provider of communications test and measurement solutions, is slated to report its second-quarter fiscal 2014 earnings after the closing bell on Jan 30, 2014.

In the prior quarter, the company’s earnings came in line with the Zacks consensus estimate. Let’s see how things are shaping up for this announcement.

Factors to Influence This Quarter

The company recently acquired privately held Network Instruments, a global developer of enterprise network and application-performance management solutions, for $200 million in cash.

The takeover of Network Instruments will strengthen the foothold of JDS Uniphase in the enterprise, data center and cloud networking segments. Currently, the application-based network performance management and network packet broker markets are growing at a CAGR of 13%. Network Instruments will enhance JDS Uniphase’s market prospects by approximately $1 billion in the near term.

However, the optical component manufacturing segment is witnessing a consolidation trend. Optical gear maker, Oclaro, acquired its peer Opnext. We believe that the merged entity may act as a major threat to JDS Uniphase.

Earnings Whispers

Our proven model does not conclusively show that JDS Uniphase is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate is poised at $0.09. Hence, the ESP is 0.00%.

Zacks Rank #3 (Hold): JDS Uniphase's Zacks Rank #3 decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of 0.00% combined with a Zacks Rank #3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some other companies to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

Palo Alto Networks, Inc. (PANW - Snapshot Report) with earnings ESP of +33.33% and Zacks Rank #3.

3M Company (MMM - Analyst Report) with earnings ESP of +0.62% and Zacks Rank #3.

Hewlett-Packard Company (HPQ - Analyst Report) with earnings ESP of +1.18% and Zacks Rank #2 (Buy).

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