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Tale of the Tape

Zacks Equity Research

Why the Earnings Streak Will Continue for Oclaro (OCLR)
September 23, 2016


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Looking for a stock that might be in a good position to beat earnings at its next report? Consider Oclaro, Inc. (OCLR - Free Report) , a firm in the Fiber Optics industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, OCLR has beaten estimates by at least 80% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, OCLR expected to post a loss of a penny per share, while it actually produced earnings of a penny per share, a significant beat. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 5 cents per share, when it actually produced earnings of 9 cents per share instead, representing a 80% surprise.

OCLARO INC Price and EPS Surprise

Thanks in part to this history, recent estimates have been moving higher for Oclaro. In fact, the Earnings ESP  for OCLR is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for OCLR as the firm currently has a Zacks Earnings ESP of 10.00%, so another beat could be around the corner.

This is particularly true when you consider that OCLR has a great Zacks Rank #1 (Strong Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that OCLR could see another beat at its next report, especially if recent trends are any guide.

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