Can ARRIS (ARRS) Surprise Earnings Estimates in Q3?
Leading video and broadband gear manufacturer, ARRIS Group, Inc. (ARRS), is set to release third-quarter 2014 results after the closing bell on Oct 29.
In the last quarter, the company delivered a negative 1.56% surprise. Let’s see how things are shaping up for this announcement.
Factors to Consider
Robust demand for home gateways, Wi-Fi enabled modems, edged routers and multi-screen software along with the acquisition of the cable set-top box business of Motorola Mobility from Google has transformed ARRIS into an integrated equipment supplier in the high-speed video and Internet delivery market. We also believe that the recent consolidation trend in the broader telecommunications industry will benefit ARRIS in the forthcoming quarter as large operators are expected to invest more in high-speed video and Internet delivery.
Earnings Whispers?
Our proven model does not conclusively show that ARRIS 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 at least 3 for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%, as both these estimates stand at 65 cents.
Zacks Rank: ARRIS’ Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.
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 these have the right combination of elements to post an earnings beat:
BlackBerry Ltd. (BBRY) with an earnings ESP of +50.00% and a Zacks Rank #2.
Ruckus Wireless, Inc. (RKUS) with an earnings ESP of +60.00% and a Zacks Rank #3.
DragonWave Inc. (DRWI) with an earnings ESP of +16.67% and a Zacks Rank #3.
Read the Full Research Report on ARRS
Read the Full Research Report on DRWI
Read the Full Research Report on RKUS
Read the Full Research Report on BBRY
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