We expect Corning Inc. (GLW) to beat expectations when it reports third-quarter 2013 results on Oct 30.

Why a Likely Positive Surprise?

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

Positive Zacks ESP: The Expected Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +3.13%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

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

The combination of Corning’s Zacks Rank #3 (Hold) and an Earnings ESP of +3.13% makes us reasonably confident in looking for a positive earnings beat.

What is Driving the Better-than-Expected Earnings?

Corning makes Gorilla Glass for LCD TVs, smartphones and tablet computers. The company’s new products, its increasing market share in the smartphone and mobile computing segments, solid execution and cost control measures are expected to generate a positive earnings surprise in the upcoming quarter.

We believe that robust demand among the U.S. consumers for big-screen televisions and introduction of various electronics products will boost Gorilla Glass sales, going forward. Also, Corning’s important product ramps in the telecom segment, recovery in the environmental markets and acquisition-driven growth in the life sciences segment will help the company to grow.

Other Stocks to Consider

Our model states that a stock needs to have both a positive earnings ESP and a Zacks Rank #1, 2 and 3 to beat earnings estimates. You could, therefore, consider other stocks like:

Melco Crown Entertainment Limited (MPEL), with Earnings ESP of +6.45% and a Zacks Rank #1 (Strong Buy).

Kemper Corporation (KMPR), with Earnings ESP of +11.36% and a Zacks Rank #1 (Strong Buy).

Exterran Partners, L.P. (EXLP), with Earnings ESP of +40.00% and a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on GLW
Read the Full Research Report on MPEL
Read the Full Research Report on EXLP
Read the Full Research Report on KMPR


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