Will Arrow Electronics (ARW) Beat Earnings Estimates? - Analyst Blog

Arrow Electronics Inc. ARW is set to report first-quarter 2014 results on May 6. Last quarter, the company posted a positive earnings surprise of 4.32%. Let's see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Arrow posted better-than-expected fourth-quarter 2013 results. Year-over-year comparisons were modestly up and the company had a favorable book-to-bill ratio. We believe that Arrow's core strength of providing best-in-class services and easy-to-acquire technologies are expected to bolster its growth in the future.

Additionally, the company's positive commentary about enhanced productivity, annual cost savings and expected contributions from Europe remain the growth drivers. Additionally, incremental sales from the strategic acquisitions are expected to boost Arrow's top line, going forward. However, uncertain economic conditions and competition from Avnet AVT and Ingram Micro IM are the concerns going forward.

Earnings Whispers?

Our proven model does not conclusively show that Arrow will beat earnings 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 $1.21. Hence, the difference is 0.00%.

Zacks Rank: Arrow's Zacks Rank #2 (Buy), 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 is another company you may want to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter:

Intuit Inc. INTU, Earnings ESP of +1.18% and a Zacks Rank #2.