Will Middleby (MIDD) Keep the Earnings Streak Alive? - Analyst Blog

Machinery company The Middleby Corporation MIDD is set to report its first quarter 2014 results on May 7, after the market closes. The company delivered 17.49% positive earnings surprise in the preceding quarter. Let's see how things are shaping up for this announcement.

Factors to Consider This Quarter

Middleby provides cooking, warming, food preparation and packaging equipment to commercial, industrial processing and residential markets. The company has been expanding with product launches in the recent past. With over 50 product launches, the company is expected to gain a significant market share in the near future.

Additionally, Middleby has been growing inorganically too. In the fourth quarter 2013, the company acquired Celfrost, Automatic Bar Controls and Wunder-Bar, which accounted for 20.8% of the sales growth. In first quarter 2014, the company acquired Market Forge Industries which is expected to increase the revenues in the near term.

Earnings Whispers?

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

Zacks ESP: The Most Accurate estimate for Middleby stands at $2.07 flat with the Zacks Consensus Estimate. Hence, the difference is 0.00%.

Zacks Rank: Middleby has a Zacks Rank #3 (Hold) which when combined with a 0.00% 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 a negative estimate revision momentum.

Other Stocks to Consider

Here are other companies having the right combination of elements to post an earnings beat this quarter and hence, worth a look:

Lindsay Corp. LNN, Earnings ESP of +8.70% and a Zacks Rank #3.

Manitex International, Inc. MNTX, Earnings ESP of +5.56% and a Zacks Rank #3.

Colfax Corp. CFX, Earnings ESP of +1.54% and a Zacks Rank #3.