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California-based consulting, engineering and technical service provider Tetra Tech Inc. (TTEK - Analyst Report) is set to report its second-quarter fiscal 2013 results on May 1. In the last quarter Tetra Tech posted earnings of 41 cents, in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this quarter.

Factors to Consider This Quarter

Recently Tetra Tech revealed its lower earnings expectation for the second half of fiscal 2013. The primary reason behind this projection is the company’s poor performance in Eastern Canada.

Earlier, Tetra Tech estimated its revenue to be in the range of $500 million to $550 million for the second quarter net of subcontractor cost. Although the company reaffirmed this guidance, it anticipates a lower figure for the second half of the year. On the whole, the weak business in the Canadian regions and poor performance in the mining segment are expected to impact the operating income by $20 to $30 million in second half.

Tetra Tech derives a major portion of its revenue from the U.S. federal government agencies. The current economic condition is largely responsible for reduction in revenue from the U.S. federal government.

Moreover, a delay in the U.S. government’s budget process and a deficit budget, which affected the procurement of its services, have left an adverse impact on its future revenues. In addition, there has been an ongoing government investigation into corruption charges pertaining to the political sphere in Quebec. This is also delaying the company’s revenue recovery process and adversely affecting its results.

Earnings Whispers?

Our proven model does not conclusively show that Tetra Tech is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case for Tetra Tech as discussed hereunder.

Negative Zacks ESP: Most Accurate Estimate for Tetra Tech stands at $0.39 while the Zacks Consensus Estimate is higher at $0.40. There is a difference of -2.50%.

Zacks Rank #4 (Sell): Tetra Tech currently has a Zacks Rank #4 (Sell). We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies operating in the same sector that have the right combination of elements to post an earnings beat this quarter:

DXP Enterprises Inc. - Earnings ESP of +8.05% and a Zacks Rank #1 (Strong Buy).

CNH Global NV - Earnings ESP of +3.45% and a Zacks Rank #2 (Buy).

Worthington Industries, Inc. (WOR - Snapshot Report) - Earnings ESP of +14.39% and a Zacks Rank #2 (Buy).

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