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The computer and peripheral equipmentcompany, Logitech International SA (LOGI - Analyst Report)i s set to report its fourth-quarter fiscal 2013 results on April 24. In the last reported quarter, it posted an 81.82% positive surprise. Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Logitechis likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings Surprise Prediction or Zacks Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at 81.82%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

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

The combination of aZacks Rank # 3 (Hold) and 81.82% ESP makes us bullish on Logitech for the impending quarter.

What is Driving the Better than Expected Earnings?

Recently, Logitech launched a number of innovative products. The new tablet and gaming accessories are expected to benefit the company in the long run. Given the current trend towards smart phones and tablets, Logitech intends to tap this high potential market through its range of accessories. In the last reported quarter (3Q13), tablet accessories represented the best-performing retail product category, with sales increasing a robust 119.2% year over year to $39.4 million.

In addition, the company’s cost-cutting initiatives are expected to benefit Logitech, saving approximately $12 million to $14 million in the fourth quarter of fiscal 2013. These savings will be primarily induced by employee retrenchments of 140 employees, or 5% of its workforce as part of its cost-cutting measure.

Moreover, the company is discontinuing with its non-profitable products and businesses. The company divested its remote control and digital video security categories with further plans to discontinue other non-profitable products, such as speaker docks and console gaming peripherals by the end of 2013.

Other Stocks to Consider

Logitechis not the only firm looking up this earnings season. We also see likely earnings beats coming from these 3 industry peers:

Avery Dennison Corporation (AVY - Analyst Report), Earnings ESP of +1.75% and Zacks Rank #2 (Buy)

Ingersoll-Rand Plc (IR - Analyst Report), Earnings ESP of +2.44% and Zacks Rank #2 (Buy).

Micron Technology Inc. (MU - Analyst Report), Earnings ESP of +200% and Zacks Rank #2 (Buy).

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