Electronics company, Generac Holdings Inc. (GNRC), is set to report fourth-quarter 2013 results on Feb 13, before the opening bell. In the last quarter, it delivered 27.7% positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors to Consider
In the third quarter, Generac reported adjusted earnings per share of $1.06, beating the Zacks Consensus Estimate of 83 cents by 27.7%. Results also surpassed the year-ago earnings by 35.9%. Revenues also increased 20.9% year over year to $363.3 million. The year-over-year rise mainly resulted from inorganic and organic revenue growth.
Generac has been attempting to gain a greater market share inorganically. In 2013, the company acquired Tower Light Slr and the generator business from Baldor. These acquisitions are expected to contribute significantly to the yearly revenues.
Earnings Whispers?
Our proven model does not conclusively show that Generac is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as we see below.
Zacks ESP: The ESP for Generac is 0.00%.This is because the Most Accurate estimate stands at 89 cents flat with the Zacks Consensus Estimate.
Zacks Rank: Generac’s Zacks Rank #3 (Hold) when combined with a 0.00% 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 a negative estimate revision 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
EnerSys (ENS), Earnings ESP of +3.70% and a Zacks Rank #2 (Buy).
GigOptix, Inc. (GIG), Earnings ESP of +25.00% and a Zacks Rank #2.
Littelfuse Inc. (LFUS), Earnings ESP of +0.94% and a Zacks Rank #3.
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