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Bristol-Myers Squibb Company (BMY - Analyst Report) is scheduled to release its fourth-quarter 2012 results before the opening bell on Thursday, Jan 24.

In the last quarter, it delivered a negative earnings surprise of 9.8% as the genericization of its key drugs, blood thinner Plavix and hypertension treatment Avapro in the US has resulted in significant loss of revenues.Let’s see how things are shaping up prior to the announcement of the fourth quarter results.

Factors to Consider this Quarter

Bristol-Myers is looking to combat the generic threat hanging over its key drugs through partnering deals and acquisitions and introducing new products to augment its product portfolio. In Dec 2012, the US Food and Drug Administration (FDA) cleared blood thinner Eliquis, co-developed with Pfizer Inc. (PFE - Analyst Report). Successful commercialization of Eliquis should boost Bristol-Myers’ top line significantly since the drug offers great commercial potential. Moreover, in Aug 2012, Bristol-Myers acquired Amylin Pharmaceuticals, Inc. in a bid to diversify its business to combat the generic threat and bolster its position in the lucrative diabetes market.

The efforts of Bristol-Myers notwithstanding, results in the fourth quarter are again likely to be hurt by the genericization of Plavix and Avapro. The Zacks Consensus Estimate for the fourth quarter has moved down by a cent to 43 cents per share over the last 7 days due to the obvious negative sentiment.

Earnings Whispers

Our proven model does not conclusively show that Bristol-Myers is likely to beat the Zacks Consensus Estimate in the fourth quarter. That is because a stock needs to have both a positive Earnings ESP (Read: http://www.zacks.com/stock/news/90676/zacks-earnings-esp-a-better-method) and a Zacks Rank #1 (Strong Buy) or at least Zacks Rank #2 (Buy) or Zacks Rank #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Negative Zacks ESP: This is because the Most Accurate estimate stands at 40 cents while the Zacks Consensus is higher at 43 cents. This results in a difference of -7.0%.

Zacks Rank #3 (Hold): Bristol-Myers’ Zacks Rank of 3, however, increases the predictive power of ESP. That said we also need to have a positive ESP to be confident for an earnings surprise call.

Other Stocks to Consider

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

Sanofi (SNY - Analyst Report) has Earnings ESP of +1.35% and carries a Zacks Rank #2 (Buy).

Mylan Inc(MYL - Analyst Report) has Earnings ESP of +4.69% and carries a Zacks Rank #2 (Buy).

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