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Fastenal Company (FAST - Analyst Report) is set to report second-quarter fiscal 2014 results on Jul 11, before the market opens.

Last quarter, Fastenal posted a positive earnings surprise of 2.74% — turning around from the negative surprises in the previous two quarters. Let’s see how things are shaping up for this announcement.

Factors to Consider this Quarter

After struggling for several quarters, Fastenal’s top line turned around in the first quarter of 2014. The company’s total average daily sales growth rate in the first quarter was 8.7%, up from 4.9% in the prior-year quarter, owing to increase in sales volume.

Moreover, the monthly sales data released for April and May (included in the current quarter) were encouraging. April daily sales grew 10%, slower than 11.6% increase in March due to the Easter headwind. The Easter holiday proved to be a headwind in April versus a benefit in March. Nevertheless, April results were significantly better than last year. Also, daily sales jumped 13.5% in May, better than both March and April and significantly better than May last year.

Though management did not issue an official guidance, it stated during the first-quarter conference call that sales could grow close to 13% in the second quarter with sales initiatives gaining traction.

If Fastenal can achieve this sales growth, management expects incremental margins to go back to the attractive 20% range. In the second half, as comparisons ease, incremental margins are expected to reach mid- to upper-20% range.

Management seems optimistic for top-line and margin growth in the coming quarters as underlying markets improve, vending re-vamps, sales improvement efforts expand and comparisons remain easy throughout 2014.

Earnings Whispers?

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

Zacks ESP:  The Earnings ESP is 0.00%.

Zacks Rank.Fastenal carries a Zacks Rank #2 (Buy) 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 negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies for investors to consider, that, according to our model have the right combination of elements to post an earnings beat this quarter:

Quanex Building Products Corporation (NX - Snapshot Report), with Earnings ESP of +20.0% and a Zacks Rank #2

Treehouse Foods Inc. (THS - Snapshot Report), with Earnings ESP of +1.21% and a Zacks Rank #1 (Strong Buy)

Johnson & Johnson (JNJ - Analyst Report), with Earnings ESP of +0.65% and a Zacks Rank #2.

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