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We expect Cubist Pharmaceuticals Inc. (CBST - Analyst Report) to beat earnings expectations when it reports first-quarter 2013 results after the closing bell on Apr 18.

Why a Likely Positive Surprise?

Our proven model shows that Cubist Pharma has the right combination of two key ingredients to beat earnings.

Positive Zacks ESP: The earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) for Cubist Pharma is +14.71% – the difference between the Most Accurate estimate of 39 cents and the Zacks Consensus Estimate of 34 cents. This indicates a likely positive earnings surprise.

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

The combination of its Zacks Rank and Earnings ESP for Cubist Pharma makes us confident of a positive earnings surprise in the to-be-reported quarter.

Drivers of Better-than-Expected Earnings

This biopharmaceutical company has delivered positive earnings surprises in three of the last four quarters with an average beat of 26.14%. Strong sales of its antibiotic injection Cubicin have contributed to the impressive showing. We expect Cubicin to continue performing well, thereby driving growth at Cubist Pharma.

We are also pleased with the company’s agreement with Optimer Pharmaceuticals Inc. to co-promote Dificid in the US for C. difficile acquired diarrhea. The impressive pipeline at Cubist Pharma is also encouraging.

Other Stocks to Consider

Cubist Pharma is not the only company looking up this earnings season. Here are some other stocks you may want to consider as our model shows these have the right combination of elements to post an earnings beat this season:

Gilead Sciences Inc. ((GILD - Analyst Report)) has an Earnings ESP of +2.08% and carries a Zacks Rank #2 (Buy).

Eli Lilly and Company (LLY - Analyst Report) has an Earnings ESP of +6.73% and holds a Zacks Rank #3 (Hold).

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