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Analog Devices, Inc. (ADI - Analyst Report) is set to report third quarter 2013 results on May 21. Last quarter, its results were in line with our expectations. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Analog Devices' second-quarter earnings were in line with the Zacks Consensus Estimate of 44 cents. Revenues were down 10.0% sequentially and at the lower end of the management guidance due to weak sales across a wide range of communications infrastructure applications, automotive and industrial segments. Margin expansion was limited due to the change in sales mix, which favored lower-margin products.

Analog Devices provided a modest outlook for the third quarter, with revenues forecast to increase 4–8% sequentially. ADI expects earnings per share in the range of 49–55 cents, in line with the Zacks Consensus Estimate of 52 cents at the midpoint.

Earnings Whispers?

The Zacks Consensus Estimate for the second quarter stands at 52 cents while that for fiscal 2013 stands at $2.18.

Analog Devices has beaten estimates twice in the last four quarters while meeting estimates in the other two. There were no estimate revisions for both the third quarter and fiscal 2013 over the past 30 days. As a result, the Zacks Consensus Estimate for both periods has remained unchanged.

The chances of a big surprise are unlikely given the lack of catalysts during the quarter. The stock carries a Zacks Rank #3 (Hold).

We caution against stocks with Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Other stocks that have both a positive earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 are:

Costco Wholesale Corp. (COST - Analyst Report), Earnings ESP of +0.98% and Zacks Rank #2 (Buy).

Hasbro Inc (HAS - Analyst Report), Earnings ESP of +3.03% and Zacks Rank #2 (Buy)

Web.com Group (WWWW - Snapshot Report) has an Earnings ESP of +2.38% and a Zacks Rank #3 (Hold).

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