Will Trimble Navigation (TRMB) Beat Earnings Estimates?

Trimble Navigation Limited (TRMB) is set to report second-quarter 2014 results on Aug 5. Last quarter, it posted a 5.3% negative surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Trimble Navigation delivered mixed first quarter 2013 results with the bottom line exceeding the Zacks Consensus Estimate and the top line missing the same. However, revenues were up 0.9% sequentially and 8.7% year over year. The increase was primarily driven by strong performance in the Field Solutions and Advanced Devices segments.

Recently, Trimble acquired the assets of privately-held MAYBIM, a provider of 3D Building Information Modeling (:BIM) services. It also acquired Mining Information Systems (:MIS), a provider of enterprise-level information. The company’s acquisitions will help it to enhance its product line, thereby boosting the top line.

For the second quarter, management expects revenues in the range of $605–$630 million, while the Zacks Consensus Estimate for revenues is pegged at $620 million. Earnings per share on a GAAP basis are expected in the range of 22–26 cents and on a non-GAAP basis within 38–42 cents. The tax rate is expected in the range of 20–22%, while share count is likely to be 265.0 million.

Earnings Whispers?

Our proven model does not conclusively show that Trimble Navigation will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 37 cents. Hence, the difference is 0.00%.

Zacks Rank: Trimble Navigation’s Zacks Rank #3 (Hold), when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #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

Here are some other companies, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Charter Communications, Inc. (CHTR), with Earnings ESP of +271.43% and a Zacks Rank #1 (Strong Buy)

Cognex Corporation (CGNX), with Earnings ESP of +12.00% and a Zacks Rank #1

Semiconductor Manufacturing International Corp. (SMI), with Earnings ESP of +33.33% and a Zacks Rank #2 (Buy)

Read the Full Research Report on TRMB
Read the Full Research Report on CHTR
Read the Full Research Report on CGNX
Read the Full Research Report on SMI


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