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Will Agilent Technologies (A) Beat Earnings Estimates in Q2?

We expect Agilent Technologies A to beat expectations when it reports second-quarter fiscal 2016 results on May 16.

Why a Likely Positive Surprise?

Our proven model shows that Agilent Technologiesis likely to beat on earnings because it has the right combination of the two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +2.56%. This is a meaningful indicator of a likely positive earnings surprise.

Zacks Rank: Agilent Technologieshas a Zacks Rank #2 (Buy).

Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement. 

The combination of Agilent Technologies’Zacks Rank #2 and +2.56% ESP makes us confident in looking for an earnings beat.

What is Driving the Better-than-Expected Earnings?

Agilent Technologies is a broad-based OEM of test and measurement equipment. The company’s focus has shifted to life sciences, genomics, diagnostics and wireless test markets, where the company has made a few important acquisitions and alliances. Agilent’s strong market position, solid growth in all its end markets, and improving gross margin should boost fiscal second-quarter earnings.

The company’s decision to divest/ wind up underperforming businesses has enhanced focus on the new Agilent for a solid recurring revenue base and diversification of geographic and industrial operations for growth. Also, the company’s focus on aligning investment toward more attractive growth avenues and innovative product launches is a positive.

In addition, we remain positive on Agilent’s broader portfolio and increased focus on segments with higher growth potential. Further, the company continues to introduce high-margin products.

Moreover, the company recently rolled out the multi-year “Agile Agilent” Program to increase efficiency and customer focus.

Other Stocks to Consider

Agilent Technologiesis not the only firm looking up this earnings season. We also see likely earnings beat coming from these companies:

TiVo Inc. TIVO, with an Earnings ESP of +25.00% and a Zacks Rank #1. The company is slated to report first-quarter 2016 earnings results on May 24.

Itron, Inc. ITRI, with an Earnings ESP of +11.76% and a Zacks Rank #2. The company is slated to report first-quarter 2016 earnings results on May 16.

Quality Systems Inc. QSII, with an Earnings ESP of +6.25% and a Zacks Rank #2. The company is slated to report fourth-quarter fiscal 2016 earnings results on May 19.

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QUALITY SYS (QSII): Free Stock Analysis Report
 
TIVO INC (TIVO): Free Stock Analysis Report
 
AGILENT TECH (A): Free Stock Analysis Report
 
ITRON INC (ITRI): Free Stock Analysis Report
 
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