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AbbVie Inc. (ABBV - Analyst Report) is scheduled to report fourth quarter 2013 results before the opening bell on Jan 31.

Last quarter, AbbVie had posted an earnings surprise of +5.13%. We expect the company to beat expectations in the fourth quarter as well.

Why a Likely Positive Surprise?

Our proven model shows that AbbVie is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: The Earnings ESP (Expected Surprise Prediction), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +2.41%. This is a very meaningful and leading indicator of a likely positive earnings surprise.

Zacks #3 Rank (Hold): Note that stocks with Zacks Rank #1, #2 and #3 have a significantly higher chance of beating earnings estimates. 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 revision momentum.

The combination of AbbVie’s Zacks Rank #3 (Hold) and an earnings ESP of +2.41% makes us confident of an earnings beat on Jan 31.

What's Driving the Better-than-Expected Earnings?

AbbVie has delivered positive earnings surprises in the last three quarters with an average beat of 3.99%.

Although revenues will be impacted by the loss of exclusivity for Tricor, Trilipix and Niaspan, the strong performance of other products should offset the negative impact of genericization. Key growth driver, Humira, will continue to boost revenues. Other products that should continue performing well include Synthroid, Creon, Zemplar and Duodopa.

Other Stocks to Consider

AbbVie is not the only company looking up this earnings season. We also see likely earnings beats coming from these companies in the health care sector:

Sanofi (SNY - Analyst Report) has earnings ESP of +2.27% and holds a Zacks Rank #3. Sanofi will report fourth quarter earnings on Feb 6.

Actavis plc (ACT - Analyst Report) has an Earnings ESP of +0.33% and holds a Zacks Rank #1 (Strong Buy). Actavis will be reporting fourth quarter earnings on Feb 20.

Allergan Inc. (AGN - Analyst Report) has an Earnings ESP of +0.75% and holds a Zacks Rank #2 (Buy). Allergan will be reporting fourth quarter earnings on Feb 5.

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