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Will ADT Corporation (ADT) Surprise This Earnings Season?

Zacks Equity Research

The ADT Corporation (ADT) is scheduled to report second quarter 2014 results before the opening bell on Apr 30. In the last reported quarter, the adjusted earnings of the company missed the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.

Growth Factors in the Second Quarter

ADT is focusing to create a strong brand, differentiated services, quality customer care and monitoring and product innovation which are likely to be the key ingredients for success.

The company is investing in its core business, improving its operating efficiency and pursuing acquisitions to complement its organic growth. Also, ADT’s decent operating platform and cost-saving initiatives keep us bullish on the stock.

The company is also working with Ford Motor Co. (F) to integrate the ADT Pulse app with the Ford SYNC AppLink, enabling drivers of equipped Ford vehicles to control aspects of the home using voice commands. This should serve well for its customers in the future. With the launch of new partnerships and new products, the company expects to gain additional traction in its business throughout the forthcoming year.

Why a Likely Positive Surprise?

Our proven model shows that ADT is likely to beat earnings since it has the appropriate combination of two key ingredients:

Positive Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +4.55%. This indicates a likely positive earnings surprise.

Zacks Rank #3 (Hold): Stocks with a 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 while going into an earnings announcement.

ADT’s Zacks Rank #3 increases the predictive power of its ESP. The combination of its Zacks Rank and Earnings ESP make us confident of a positive earnings surprise in the soon-to-be reported quarter.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat in the imminent future.

Inernational Paper Company (IP) has an Earnings ESP of +1.75% and a Zacks Rank #3 (Hold).

Mobile Mini, Inc (MINI) has an Earnings ESP of +5.26 % and a Zacks Rank #2 (Buy)

Manitex International, Inc (MNTX) has an Earnings ESP of +5.56% and a Zacks Rank #3 (Hold).

Read the Full Research Report on F
Read the Full Research Report on IP
Read the Full Research Report on MNTX
Read the Full Research Report on ADT
Read the Full Research Report on MINI

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