Arris Enterprises, Inc. (ARRS), a leading video and broadband gear manufacturer, is scheduled to report fourth-quarter 2013 financial results after the closing bell on Feb 19, 2014.
In the last quarter, the company delivered a 28.57% positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors to Influence This Quarter
Arris completed the acquisition of the cable set-top box business of Motorola Mobility. This will undoubtedly help Arris attain a strong foothold in the high-speed video offerings and Internet delivery markets. The merged entity has a global presence with more than 500 customers in 70 countries.
With Motorola Mobility’s Cable Home business in its kitty, Arris is likely to become a formidable player in the video infrastructure and customer premises equipment for the cable TV industry.
Arris is solely dependent on cable operators for its revenues. Lack of industry diversification may result in limited business prospects. Potential shifts in industry dynamics may adversely impact cable TV service providers. This is evident from the fact that large telecom carriers in the U.S. are increasingly expanding their high-speed fiber-based network and satellite TV providers are also upgrading their networks.
Earnings Whispers
Our proven model does not conclusively show that Arris Enterprises is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at $0.42. Hence, the ESP is 0.00%.
Zacks Rank: Arris Enterprises' Zacks Rank #1 (Strong Buy) when combined with a Zacks Earnings ESP of 0.00% makes surprise prediction difficult.
Other Stocks to Consider
Here are some other companies worth considering as our model shows these have the right combination of elements to post an earnings beat this quarter.
SBA Communications Corp. (SBAC) with earnings ESP of +100.00% and a Zacks Rank #2 (Buy).
Equinix, Inc. (EQIX) with earnings ESP of +6.41% and a Zacks Rank #3 (Hold).
Palo Alto Networks, Inc. (PANW) with earnings ESP of +33.33% and a Zacks Rank #3.
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