Agilent Technologies Inc. (A) is set to report fiscal fourth-quarter 2014 results on Nov 17. Last quarter, it posted a 5.41% positive surprise. Let’s see how things are shaping up for this announcement.
Factors at Play
Agilent delivered decent third quarter results with both the top and bottom lines surpassing the Zacks Consensus Estimate. Results were primarily driven by continued improvement in the company’s end markets and helped by good cost control and a better product mix.
Agilent recently completed the spinoff of its electronic measurement segment into a new company named Keysight Technologies (KEYS). Its decision to divest the underperforming EM business makes perfect sense under the circumstances. The separation will enable management of both companies to focus on their respective growth opportunities.
This enhanced focus on the new Agilent (consisting of Life Science, Chemical Analysis, and Diagnostics and Genomics businesses) will enable management to expand a solid base of recurring revenues and diversify geographic operations.
For the fourth quarter, Agilent expects revenues of $1.81 billion to $1.85 billion, with core revenue (excluding currency and M&A) growth of 6.3%. Earnings are expected in a range of 87 cents to 91 cents a share. Analysts polled by Zacks expect earnings of 95 cents, well above the guided range.
Earnings Whispers?
Our proven model does not conclusively show that Agilent Technologies will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 50 cents. Hence, the difference is 0.00%.
Zacks Rank #5 (Strong Sell): 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, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Best Buy Co., Inc. (BBY), with Earnings ESP of +4.17% and a Zacks Rank #1 (Strong Buy)
Ross Stores Inc. (ROST) with Earnings ESP of +1.15% and a Zacks Rank #2 (Buy)
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