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Industrial goods manufacturer Ingersoll-Rand Plc IR is scheduled to report fourth-quarter 2016 results before the opening bell on Feb 1. In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 12 cents. Ingersoll has a healthy earnings surprise history. In the trailing four quarters, it managed to beat earnings estimates on every occasion with an average positive earnings surprise of 12.9%.

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

Key Factors in the Quarter

Ingersoll expects to reap continued synergistic benefits from the product, channel, and service footprint investments made over the past five to seven years. The company continues to anticipate healthy revenue contributions from the HVAC (heating, ventilation, and air conditioning) and transport refrigeration business units as well as from the compression technology business unit. The company envisions significant contributions from its Internet of Things platform through connected buildings, intelligent monitoring of service, diagnostic and self-healing systems, and consumer marketing and fulfillment efforts.

Also, the company’s strategic acquisitions are likely to serve as growth drivers, supplementing organic growth. Furthermore, Ingersoll is likely to achieve steady improvements in operating profitability with a strong commitment to fund new product developments, investing in IT platform and building its channel services footprint and product management capabilities.

Ingersoll has a solid foundation of global brands and leading market share in all major product lines. The geographic and product diversity coupled with a large installed product base provides ample growth opportunities within service, spare parts and replacement revenue streams. Additionally, the company’s complementary portfolio of products and services is likely to assist in strengthening its market position and achieving high productivity.

In the to-be-reported quarter, adjusted earnings from continuing operations are expected to be in the range of 88 to 93 cents per share.

Why a Likely Positive Surprise?

Our proven model conclusively shows that Ingersoll is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is perfectly the case here as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at +1.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.