Spotting earnings disappointments and surprises

How to Spot Potential Earnings Disappointments: There is no sure
fire way to spot stocks that will fail during earnings season.
However, there are ways to improve your odds. In general, stocks
that have disappointed in past quarters are more likely to
disappoint in future quarters. Plus stocks that have seen lower
expectations leading up to their announcement date also tend to
fall short of the mark more often. The clues to both of these
items can be found on the Estimates research report. Here is
the link to see that page for IBM and you can go from there to
research any of your stocks http://at.zacks.com/?id=1504.

How to Spot Potential Earnings Surprises: This is the inverse
story from above. Those stocks that have reported positive
surprises in the past are more likely to do so in the future. In
addition, earnings estimate increases leading into earnings
season is a very good indication as well. However, the simplest
way to find these winners is by following the Zacks Rank which
concentrates on these same variables. You can either look at the
full list of Zacks #1 Ranked stocks at
http://at.zacks.com/?id=1551. Or screen for Zacks #1 Ranked stocks with the highest past earnings surprises through our
custom screener at http://at.zacks.com/?id=1535.