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One of the world’s leading consumer products company, The Clorox Company (CLX - Analyst Report) is likely to beat the expectations while reporting its fiscal 2013 second-quarter results on Feb 4.

Why a Likely Positive Surprise?

Our proven model shows that Clorox may beat the earnings since it has the right combination of two key components – Positive Earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #3.

Positive Zacks ESP: Clorox currently has an Earnings ESP of +1.24%. This is because the Most Accurate Estimate stands at 82 cents, while the Zacks Consensus Estimate is pegged at 81 cents.

Zacks #3 Rank (Hold): Note that stocks with Zacks Rank #1, #2 and #3 have significantly higher chances of beating the earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.

The combination of Clorox’s Zacks Rank #3 (Hold) and Earnings ESP of +1.24% makes us confident regarding a positive earnings beat by the company on Feb 4.

What is driving the Better-than-Expected Earnings?

We believe that the company’s intensive capital investments in information technology systems and R&D will facilitate it in improving productivity while providing platforms for growth, product innovation and cost savings.

The positive trend is seen in the trailing four-quarter average surprise of 8.3%, which was greatly helped by a 6.3% surprise in the last quarter. During the previous quarter, the company mainly benefited from improved sales resulting from higher prices, while inflation played spoilsport impacting manufacturing and logistics costs, as well as other supply chain costs.

Other Stocks to Consider

Clorox is not the only firm looking up this earnings season. The following companies – Clorox’s industry peers – are also likely to beat the earnings in the to-be-reported quarter:

Inter Perfums Inc. (IPAR - Snapshot Report) has Earnings ESP of +13.33% and carries a Zacks Rank #1 (Strong Buy).

Colgate-Palmolive Company (CL - Analyst Report) with Earnings ESP of +1.43% and a Zacks Rank #2 (Buy).

Proctor & Gamble Company (PG - Analyst Report) with Earnings ESP of +1.04% and a Zacks Rank #2 (Buy).

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