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Will Nintendo Co.'s (NTDOY) Earnings Surprise This Season?

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Nintendo Co. Ltd. ((NTDOY - Free Report) ) is set to report first-quarter fiscal 2015 results on Jul 30, 2014. In the previous quarter, the company reported a loss of 25 cents per share, much narrower than the Zacks Consensus Estimate of 34 cents.

Let’s see how things are shaping up for this quarter.

Growth Factors in the Past Quarter

Nintendo’s first-quarter results will primarily depend on the performance of Mario Kart 8, which was released in May. Investors will also eagerly watch the sales performance of Wii U and 3DS.

The console maker continues to face significant competition from Sony’s PlayStation 4 and Microsoft’s Xbox One gaming systems, which will remain a headwind. Moreover, inconsistent product pipeline unlike other game developers like Electronic Arts and Activision will hurt top line and profitability.

Earnings Whispers?

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

Zacks ESP: Nintendo currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 11 cents.

Zacks Rank: Nintendo has a Zacks Rank #3 (Hold), which when combined with a 0.00% ESP, makes surprise prediction difficult.

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

Here are a few stocks worth considering that, according to our model, have the right combination of elements to post an earnings beat this quarter:

Synaptics (SYNA - Free Report) , with an Earnings ESP of +4.07% and a Zacks Rank #1 (Strong Buy).

Iron Mountain (IRM - Free Report) , with an Earnings ESP of +12.82% and a Zacks Rank #2 (Buy).

Western Digital (WDC - Free Report) , with an Earnings ESP of +4.02% and a Zacks Rank #2.

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