Will Harman International (HAR) Beat Earnings in Q1?
We expect audio product maker, Harman International Industries, Inc. (HAR) to beat expectations when it reports first quarter fiscal 2015 results on Oct 30. Last quarter, it posted a 2.46% positive surprise. The company has posted an average positive earnings surprise of 9.70% over the past four quarters.
Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Harman is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +0.89%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks #1, #2 and #3 have a significantly higher chance of beating earnings.
The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.
The combination of Harman’s Zacks Rank #3 and +0.89% ESP makes us very confident in looking for a positive earnings beat on Oct 30.
What is Driving the Better-than-Expected Earnings?
We believe that Harman’s new manufacturing capacities, growing product pipeline, solid patent portfolio, new awards as well as product launches will boost top line and profitability in 2015 and beyond.
Moreover, Harman continues to expand due to its partnerships with the likes of Apple (AAPL) and Google (GOOGL), which are a significant positive. Additionally, we believe that the recently announced partnerships with Softbank, Sprint Corp., Trikomsel and Brightstar will expand Harman’s market share, going forward. However, intensifying competition from Sony Corp. remains a concern.
Per Gartner, in-vehicle infotainment systems will represent around $3.0 billion semiconductor market opportunity by 2017. Hence, being the leading infotainment group, Harman’s near-term prospects are bright.
Other Stocks to Consider
Harman is not the only firm looking up this earnings season. We also see likely earnings beats coming from Invensense Inc. (INVN), with an Earnings ESP of +10.00% and Zacks Rank #2.
Read the Full Research Report on HAR
Read the Full Research Report on AAPL
Read the Full Research Report on INVN
Read the Full Research Report on GOOGL
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