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Garmin (GRMN) Q3 Earnings: What's in the Cards this Time?

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Garmin Ltd. (GRMN - Free Report) , a leading provider of navigation, communication and information devices, is slated to report third-quarter 2016 results on Oct 26. Last quarter, the company posted a positive earnings surprise of 29.85%.

Factors to Consider

Garmin has been performing well in each and every segment. In the second quarter, product line expansion was its top priority.

The company realized positive contribution from the DeLorme acquisition, the provider of the inReach series of affordable two-way satellite communication devices for consumers. DeLorme helped in adding device and recurring service revenue to the outdoor segment.

Garmin also started shipments of vivoactive HR and vivofit 3 activity trackers, Forerunner 735XT multi-sport-capable running watch and vivosmart HR + smart activity tracker with GPS.

Management focuses on continued innovation to deliver compelling products across served markets. However, macroeconomic challenges remain a part of the operating environment.

GARMIN LTD Price and EPS Surprise

Earnings Whispers

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

Zacks ESP: The most Accurate estimate is pegged at 51 cents while the Zacks Consensus Estimate stands at 53 cents. Hence, the difference is -3.77%.

Zacks Rank: Garmin’s Zacks Rank #2 when combined with a -3.77% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 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 stocks, which you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Veeco Instruments Inc. (VECO - Free Report) with an Earnings ESP of +17.86% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Armstrong World Industries, Inc. (AWI - Free Report) with an Earnings ESP of +1.32% and a Zacks Rank #2.

NVIDIA Corporation (NVDA - Free Report) , with an Earnings ESP of +8.93% and a Zacks Rank #3.

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