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We expect Agilent Technologies Inc. (A - Analyst Report) to beat expectations when it reports fiscal second quarter 2014 results on May 14.

Why a Likely Positive Surprise?

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

Positive Zacks ESP: Earnings Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +1.39%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank #2 (Buy): Note that stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement. 

The combination of Agilent’s Zacks Rank #2 and +1.39% ESP makes us very confident about an earnings beat on May14.

What is Driving the Better Than Expected Earnings?

Agilent’s introduction of new products and solutions (with higher margins), important acquisitions in areas like life sciences, genomics, diagnostics and wireless test markets are expected to lead to a positive earnings surprise in the upcoming quarter.

Moreover, Agilent’s recent acquisition of Electrothermal Analysis Technology from Gradient Design Automation will enhance its power to identify and solve thermal problems during integrated circuit (IC) development. Thus, the acquisition makes Agilent the owner of highly efficient technology that can solve an important industry problem. Thus, the deal is expected to be accretive to both margins and earnings.

The positive trend is also seen in the trailing four-quarter average positive surprise of 8.2%, which was greatly helped by the 1.5% surprise in the last-reported quarter.

Other Stocks to Consider

Agilent is not the only firm looking up this earnings season. We also see likely earnings beats coming from these 3 technology sector peers:

Intuit Inc. (INTU - Snapshot Report), with Earnings ESP of +1.18% and a Zacks Rank #2 (Buy)

Infinera Corporation (INFN - Snapshot Report), with Earnings ESP of +33.33% and a Zacks Rank #2.

BlackBerry Limited (BBRY - Analyst Report), with Earnings ESP of +17.86% and a Zacks Rank #2.

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