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ADTRAN Inc. (ADTN - Analyst Report) is set to release its second-quarter 2014 financial numbers after the closing bell on July 15, 2014.

In the last reported quarter, the company had delivered a robust 12.50% earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

The company continues to perform well owing to strong contributions from the U.S., Europe, the Middle East, Africa and Latin America. ADTRAN has stabilized its businesses with Tier 1 carriers, apart from winning contracts from Tier 2 and Tier 3 carriers as well.

Further, the acquisition of the fixed-line Broadband Access business from Nokia Networks enhances the company’s growth prospects. The company has begun working on selected Nokia Networks products using its supply chain management system and believes that the new business will add to ADTRAN’s global presence given its established foothold in the international market.

Nevertheless, ADTRAN is facing double-edged problems. Firstly, the communications equipment industry is currently going through a volatile phase due to uneven capital spending of telecom carriers. Secondly, increasing competitive pressure within the industry may serve as a potential headwind for the company.

Earnings Whispers?

Our proven model does not conclusively show that ADTRAN 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 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zero Zacks ESP: This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 25 cents. This leads to an ESP of 0.00% for ADTRAN.

Zacks Rank: ADTRAN has a Zacks Rank #3 (Hold) which when combined with ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #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 some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

West Corporation (WSTC - Snapshot Report) has an earnings ESP of +2.9% and carries a Zacks Rank #2 (Buy).

Gogo Inc. (GOGO - Snapshot Report) has an earnings ESP of +4.55% and carries a Zacks Rank #3 (Hold).

SBA Communications Corp. (SBAC - Snapshot Report) has an earnings ESP of +200% and carries a Zacks Rank #3 (Hold).

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