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Machinery company Xylem Inc. (XYL - Analyst Report) is set to report first-quarter 2014 results on Apr 29, before the opening bell. Last quarter, the company delivered 7.69% positive earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider

In the fourth quarter of 2013, Xylem reported year-over-year improved results, with adjusted earnings per share of 56 cents, 19% higher than the year-ago quarter.

Revenues for the reported quarter improved roughly 7% year over year to $1.03 billion. The increase in revenues was the result of improved demand in the industrial and public utility markets.

Management is optimistic of a similar growth momentum in 2014 which started in the second half of 2013. Revenues in 2014 are expected to increase 2% to 4% year over year to roughly $4.0 billion. Adjusted net income is estimated in the range of $345 to $370 million, with earnings per share in the range of $1.85 to $2.00.

Earnings Whispers?

Our proven model does not conclusively show that Xylem is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as we see below.

Zacks ESP: This is because the Most Accurate estimate stands at 32 cents flat with the Zacks Consensus Estimate. Hence, the difference is 0.00%.

Zacks Rank: Xylem has a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks to Consider

Here are other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Manitex International, Inc. (MNTX - Snapshot Report), Earnings ESP of +5.56% and a Zacks Rank #3.

Ingersoll-Rand Plc (IR - Analyst Report), Earnings ESP of +1.82% and a Zacks Rank #3.

Rockwell Automation Inc. (ROK - Analyst Report), Earnings ESP of +1.38% and a Zacks Rank #3.

Read the Full Research Report on XYL
Read the Full Research Report on ROK
Read the Full Research Report on IR
Read the Full Research Report on MNTX


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