Will Roper (ROP) Miss Earnings Estimates? - Analyst Blog

Roper Industries Inc. ROP is set to report first quarter 2014 results on Apr 28. Last quarter it posted a 3.12% positive surprise. We note that Roper has outperformed the Zacks Consensus Estimate in the preceding four quarters with an average positive surprise of 1.48%.

Let's see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Roper reported impressive results in the fourth quarter of 2013 and the management provided an upbeat guidance too. A strong backlog and robust organic growth are expected to drive earnings. Moreover, accretive acquisitions will expand the company's product portfolio, providing a significant competitive edge over its peers.

However, macroeconomic concerns, integration issues due to acquisitions and competition from Danaher Corp. DHR, Dover Corp DOV and Ingersoll-Rand plc IR are significant headwinds. Moreover, a high debt level is a major concern, going forward.

Earnings Whispers?

Our proven model does not conclusively show that Roper 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 you will see below.

Negative Zacks ESP: That is because the Most Accurate estimate stands at $1.33 while the Zacks Consensus Estimate is higher at $1.35. That is a difference of -1.48%.

Zacks Rank #3 (Hold): Roper's Zacks Rank #3 when combined with a negative 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.