Genuine Parts Company GPC is set to report first-quarter 2015 results on Apr 21. In the last quarter, the company had posted an earnings surprise of 0.00%. Let us see how things are shaping up for this announcement.
Factors Influencing this Quarter
Genuine Parts has undertaken various initiatives to boost sales and earnings, such as product line expansion, penetration into new markets and cost-saving activities. The company relies on a diverse product portfolio for top- and bottom-line growth. Moreover, the recent acquisitions, including those of JAL associates and Miller Bearing, should augment the company’s revenues in the first quarter.
However, Genuine Parts expects to face challenges in the Electrical/Electronic Materials segment in the first half of 2015 owing to sluggish demand in the telecommunications customer base and deflation in copper pricing.
Earnings Whispers
Our proven model does not conclusively show that Genuine Parts is likely to beat earnings 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. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at $1.05.
Zacks Rank: Genuine Parts carries a Zacks Rank #3 (Hold). Though a Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
General Motors Company GM has an Earnings ESP of +4.17% and a Zacks Rank #1 (Strong Buy). The company will report first-quarter 2015 earnings on Apr 23.
Allison Transmission Holdings, Inc. ALSN has an Earnings ESP of +4.62% and a Zacks Rank #1. The company will report first-quarter 2015 earnings on Apr 27.
Meritor, Inc. MTOR has an Earnings ESP of +9.09% and a Zacks Rank #3. It will release second-quarter fiscal 2015 earnings results on Apr 29.
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