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Corning (GLW - Analyst Report) is set to report second-quarter 2014 results on Jul 29. Last quarter, it posted a 3.3% positive surprise. Let’s see how things are shaping up for this announcement.

Factors this Past Quarter

The company’s first-quarter earnings were above the Zacks Consensus Estimate by a penny due to higher volumes. Revenues were up 14.2% sequentially and 26.2% year over year on the back of improvement in Display Technologies segment.

Gross margins were up 125 basis points sequentially driven by synergies related to the CPM integration. However, pricing was a negative in the quarter.

Going forward, according to Corning, the TV market would remain strong in 2014, with average screen sizes continuing to increase. For the third quarter, Corning expects gross margin to be approximately 46.0%, which will vary with manufacturing product mix.

Earnings Whispers?

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

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 37 cents. Hence, the difference is 0.00%.

Zacks Rank: Corning’s Zacks Rank #2 (Buy) 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

You could consider other stocks with a positive Earnings ESP and a favorable Zacks Rank such as:

Semiconductor Manufacturing International Corp. (SMI - Snapshot Report), with an Earnings ESP of +33.3% and a Zacks Rank #1 (Strong Buy).

Newfield Exploration Co. (NFX - Analyst Report), with an Earnings ESP of +1.96% and a Zacks Rank #1.

TIM Participacoes S.A. (TSU - Snapshot Report), with an Earnings ESP of +16.67% and a Zacks Rank #1.

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