ManpowerGroup Inc. (MAN - Analyst Report) is slated to report its first-quarter 2013 results before the market opens on Apr 19. In the last quarter, it posted a positive surprise of 18.2%. Let’s see how things are shaping up for this announcement.
Growth Factors this Past Quarter
Manpower, the global leader in the employment services industry, posted stronger-than- anticipated fourth-quarter 2012 results on the back of effective cost management and better gross margin. The company is contemplating on exiting lower margin business and venturing into high margin business. On the other hand, the ManpowerGroup Solutions business sustained its growth momentum. The demand for the counter-cyclical outplacement services also portrayed signs of steadiness, which increased 16% during the quarter. Canada, U.K., China and India, all contributed to the company’s growth story.
Our proven model does not conclusively show that Manpower is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) 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: ESP for Manpower is -2.27%. This is because the Most Accurate Estimate stands at 43 cents, while the Zacks Consensus Estimate is pegged at 44 cents.
Zacks Rank #2 (Buy): Manpower’s Zacks Rank #2 (Buy) lowers the predictive power of ESP because the Zacks Rank #2 when combined with a negative ESP makes surprise prediction difficult. 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.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Hertz Global Holdings, Inc. (HTZ - Snapshot Report) , Earnings ESP of +5.56% and a Zacks Rank #1 (Strong Buy).
Conn’s, Inc. (CONN - Snapshot Report) , Earnings ESP of +3.85% and a Zacks Rank #1 (Strong Buy).
Kraft Foods Group, Inc. , Earnings ESP of +3.13% and a Zacks Rank #2 (Buy).