We expect financial services company, The Hartford Financial Services Group, Inc. (HIG) to beat expectations when it reports third quarter 2013 results on Oct 28 after the closing bell.
Why a Likely Positive Surprise?
Our proven model shows that Hartford Financial is likely to beat earnings because it has the right combination of two key ingredients:
Positive Zacks ESP: The Earnings ESP (Expected Surprise Prediction), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.21%. This is a meaningful and leading indicator of a likely positive earnings surprise for shares.
Zacks Rank #2 (Buy): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.
The combination of Hartford Financial’s Zacks Rank #2 (Buy) and an Earnings ESP of +1.21% makes us confident in looking for a positive earnings beat on Oct 28.
What is Driving the Better-Than-Expected Earnings?
An extension of the home and auto insurance contract with the American Association of Retired Persons (AARP) and repurchase of shares in July are expected to lead to a positive earnings surprise for Hartford Financial in the upcoming quarter.
Hartford Financial posted positive earnings surprise in two of the last four quarters with an average beat of 19.73% aided by increase in new business volume. Divestiture of Hartford Financial’s non-core businesses to focus on its U.S. operations also helped.
Other Stocks to Consider
Hartford Financial is not the only company looking up this earnings season. We also see likely earnings beats coming from these 3 stocks in the industry:
Kemper Corporation (KMPR), Earnings ESP of +11.36% and Zacks Rank #1 (Strong Buy). Kemper is scheduled to report its third quarter 2013 results on Oct 31, after the closing bell.
American International Group, Inc. (AIG) Earnings ESP of +2.17% and Zacks Rank #2 (Buy). AIG is scheduled to report its third quarter 2013 results on Oct 31, after the closing bell.
PartnerRe Ltd. (PRE), Earnings ESP of +1.72% and Zacks Rank #3 (Hold). PartnerRe is scheduled to report its third quarter 2013 results on Oct 28, after the closing bell.
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