Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, Explained

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time. Furthermore, by using these parameters, investors have seen 28.3% annual returns on average, according to our 10 year backtest.

Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.

Should You Consider Eaton?

The final step today is to look at a stock that meets our ESP qualifications. Eaton (ETN Quick QuoteETN - Free Report) earns a #2 (Buy) 27 days from its next quarterly earnings release on November 3, 2026, and its Most Accurate Estimate comes in at $3.55 a share.

By taking the percentage difference between the $3.55 Most Accurate Estimate and the $3.53 Zacks Consensus Estimate, Eaton has an Earnings ESP of +0.52%. Investors should also know that ETN is one of a large group of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

ETN is just one of a large group of Industrial Products stocks with a positive ESP figure. Parker-Hannifin (PH Quick QuotePH - Free Report) is another qualifying stock you may want to consider.

Parker-Hannifin is a Zacks Rank #2 (Buy) stock, and is getting ready to report earnings on November 5, 2026. PH's Most Accurate Estimate sits at $8.16 a share 29 days from its next earnings release.

The Zacks Consensus Estimate for Parker-Hannifin is $8.10, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +0.75%.

ETN and PH's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>