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Will Vocus (VOCS) Disappoint this Earnings Season?

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Vocus Inc. is set to report fiscal fourth-quarter 2013 results on Feb 4. Last quarter, it posted a positive earnings surprise of 33.3%. Let’s see how things are shaping up for this announcement.

Factors This past Quarter

Vocus reported mixed third-quarter results, wherein the top line missed the Zacks Consensus Estimate while the bottom line came ahead of the same.

The company continues to acquire more customers for its marketing suite, which reflects growing demand. The company is targeting more customers and cloud opportunities in the small and medium business space. Nonetheless, continuous decline in demand for its legacy PR solution, margin contraction, currency fluctuations and competition are the key concerns for the company, going forward.

Earnings Whispers?

Our proven model does not conclusively show that Vocus is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 9 cents per share. Hence, the difference is 0.00%.

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 negative estimate revisions momentum.

Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter: 

Zillow Inc. with Earnings ESP of +20.0% and a Zacks Rank #1 (Strong Buy).

ON Semiconductor Corp. with Earnings ESP of +14.29% and a Zacks Rank #2 (Buy).

Moody's Corporation (MCO - Free Report) with Earnings ESP of +1.30% and a Zacks Rank #2.

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