Agilent Technology (A) is set to announce its second-quarter 2013 results on May 14. Let’s see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Agilent posted moderate results due to a softness in the spending environment caused by lingering macroeconomic issues. The industrial/semi, communications, academic/government and forensics/environmental end markets were particularly weak.
However, management is positive about the fact that its diversification process into segments with higher growth potential and introduction of new products (with higher margins), which along with those acquired from Dako and Varian, continue to improve its growth prospects.
Agilent’s focus has shifted to life sciences, genomics, diagnostics and wireless test markets, where it has made a few important acquisitions. The company already enjoys a strong position in its markets and its attempt to strengthen its position in segments with better growth potential may boost its revenue in the future.
Our proven model does not conclusively show that Agilent is likely to beat earnings this quarter. That is because a stock needs to have both a positive Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Most Accurate estimate stands at 65 cents while the Zacks Consensus Estimate is at 67 cents. That is a difference of -2.99%.
Zacks Rank #3 (Hold): Agilent’s Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Hasbro Inc. (HAS) has an Earnings ESP of +3.03% and a Zacks Rank #2 (Buy).
International Game Technology (IGT) has an Earnings ESP of +3.23% and a Zacks Rank #2 (Buy).
Web.com Group (WWWW) has an Earnings ESP of +2.38% and a Zacks Rank #3 (Hold).
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