TASER International Inc. TASR is set to report first-quarter 2015 results on Apr 30. Last quarter, the company posted a negative earnings surprise of 10%. Let's see how things are shaping up for this announcement.
Factors to Consider
TASER International has been witnessing robust demand for AXON cameras in the wake of the President’s call to maximize transparency and accountability in policing following the Ferguson incident. The company has received substantial orders for its AXON body-worn cameras and EVIDENCE.com solution from several law enforcement agencies during the first quarter.
Last December, President Obama proposed a funding of $263 million for the purchase of 50,000 body-worn cameras for law enforcement agencies. The funding includes $75 million over three years to be spent by the police for purchasing cameras. It also includes provisions for additional training of police officers. The White House plans to equip 50,000 officers with cameras, thereby doubling the number of cameras presently in use in the country.
It is worth noting that bookings at the AXON segment skyrocketed 371.6% to $24.6 million in the fourth quarter of 2014 from the year-ago level of $5.2 million.
The growing order book for AXON body cameras and EVIDENCE.com reflects the police departments’ eagerness to improve transparency. In an attempt to do that, they are now deploying their officers with body cameras, thereby ensuring judicious use of firearms as well as fewer occurrences of incidents like the Fergusson case. With the shift toward body cameras and less lethal weapons, TASER International will likely gain immense traction, going forward.
However, we are cautious of rising costs of the company that had hit its fourth-quarter earnings, making it fall by 10% year over year.
Earnings Whispers?
Our proven model does not conclusively show that TASER International 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 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimates. However, that is not the case here due to the following factors:
Zacks ESP: Earnings ESP for TASER International is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 6 cents per share.
Zacks Rank: TASER International’s Zacks Rank #3 (Hold), when combined with a 0.00% ESP, makes a 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.
Stock to Consider
Here is a company you may want to consider as our model shows that it has the right combination of elements to post an earnings beat:
SuperCom Ltd. SPCB has an Earnings ESP of +10.00% and a Zacks Rank #2.
Defense Releases
Lockheed Martin Corp. LMT posted first-quarter 2015 earnings of $2.74 per share, comfortably surpassing the Zacks Consensus Estimate of $2.48 by 10.5%. Earnings in the reported quarter however declined 4.5% from $2.87 per share a year ago, as lower fighter jet demand led to less revenue.
Raytheon Company RTN reported first-quarter 2015 earnings from continuing operations of $1.78 per share, beating the Zacks Consensus Estimate of $1.43 by 24.5%.
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