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We expect ManpowerGroup (MAN - Analyst Report), the global leader in the employment services industry, to beat expectations when it reports fourth-quarter 2012 results on Jan 30, 2013.

Why a Likely Positive Surprise?

Our proven model shows that Manpower is likely to beat earnings because it has the right combination of two key components.  

Positive Zacks ESP: ManpowerGroup currently has an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +1.30%. This is because the Most Accurate estimate stands at 78 cents, while the Zacks Consensus Estimate is pegged at 77 cents.

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

The combination of Manpower’s Zacks Rank #2 (Buy) and +1.30% ESP make us very confident regarding a positive earnings beat on Jan 30th.

What is Driving the Better than Expected Earnings?     

Manpower’s brand value and strong global network provides a competitive advantage to the company and reinforces its dominant position in the market. The company’s comprehensive range of services makes it a true global staffing firm. The company is contemplating on exiting its lower margin business and venturing into high margin business, as well as deriving benefits from growth prospects in under penetrated staffing markets. The company is also focusing on controlling expenses. On the other hand, the ManpowerGroup Solutions business is sustaining its growth momentum. All these factors are expected to drive results in the upcoming quarter.

The positive trend is seen in the trailing four-quarter average surprise of 19.3%.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Hertz Global Holdings, Inc. (HTZ - Snapshot Report), Earnings ESP of +6.25% and Zacks Rank #1 (Strong Buy)

Mastercard Incorporated (MA - Analyst Report), Earnings ESP of +1.25% and Zacks Rank #2 (Buy)

Global Payments Inc. (GPN - Snapshot Report), Earnings ESP of +1.14% and Zacks Rank #2 (Buy)

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