Automatic Data Processing, Inc. ADP is set to report third-quarter fiscal 2016 results on Apr 28. Last quarter, it had posted a positive earnings surprise of 1.41%. The company has posted an average positive earnings surprise of 0.30% over the past four quarters. Let’s see how things are shaping up for this announcement.Factors to Consider Automatic Data Processing has been benefiting from the increasing demand for its offerings propelled by the ACA and some other similar bills. The company’s TotalSource and Analytics divisions are also showing strength and the trend is likely to continue. In addition, the company is divesting its non-core assets to focus more on its primary business.We believe that the company’s higher revenue per client, strong customer retention ratio and lower cost of operations place it in an advantageous position. However, the company has been seeing some negative impact on its retention rate owing to the migration from the legacy business and increasing competition in the sphere.To overcome this to an extent, the company has been ramping up its resources in the service-and-support division in tune with growing demand. While we expect the company’s continuous investments in these new initiatives to drive growth over the long term, it will weigh on near-term earnings.In addition, a volatile macroeconomic environment, slower-than-expected employee recovery and increasing competition from the likes of Paychex, Equifax Inc. EFX and TriNet Group, Inc. TNET are the other near-term headwinds.Earnings WhispersOur proven model does not conclusively show that Automatic Data Processing will beat earnings this quarter. This 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: Automatic Data Processing has an Earnings ESP of 0.00% as both the Most Accurate and the Zacks Consensus Estimate stand at $1.18. Zacks Rank: Automatic Data Processing has a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.Stock to ConsiderHere is a company that has the right combination of elements, according to our model, to post an earnings beat this quarter:Silicon Motion Technology Corp. SIMO with Earnings ESP of +7.27% and a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EQUIFAX INC (EFX): Free Stock Analysis Report SILICON MOTION (SIMO): Free Stock Analysis Report AUTOMATIC DATA (ADP): Free Stock Analysis Report TRINET GROUP (TNET): Free Stock Analysis Report To read this article on Zacks.com click here.