Application software provider, Oracle Corp. (ORCL - Analyst Report) is set to report fiscal fourth quarter 2015 results on Jun 17. Last quarter, it posted a 1.56% positive surprise. The company has posted an average negative earnings surprise of 1.12% over the past four quarters.  Let’s see how things are shaping up for this announcement.

Factors to Consider

Oracle posted mixed third-quarter results with earnings managing to beat the Zacks Consensus Estimate but revenues lagging the same.

We believe strong growth prospects in SaaS, PaaS and Big Data are encouraging. Speedy adoption of cloud suites will drive incremental top-line growth going forward. Moreover, the company’s licensing and product support business remains strong with a significant proportion of the total revenue coming from these.

However, though Oracle has been taking initiatives to strengthen its capabilities in the cloud, the ongoing business transition on the one hand and the strengthening of the U.S. dollar on the other continue to weigh on its financials. Further, revenues from a cloud subscription model are realized over a period of several years, which remains a drag in the near term.

Also, stiff competition from the likes of IBM (IBM - Analyst Report) and Microsoft Corp (MSFT - Analyst Report) remains a major headwind in the near term.

For fourth–quarter fiscal 2015, Oracle expects total revenue growth in the range of 1% to 6%. Non-GAAP earnings per share are expected in the 90 cents to 96 cents range. On a non-GAAP basis, SaaS and PaaS are expected to grow in the 27% to 31% range, while IaaS is likely to grow in the range of 29% to 33%. Software and Cloud revenues are expected to grow 2% to 6%. Hardware system revenues are expected to be up 2% to down 8%.

Earnings Whispers

Our proven model does not conclusively show that Oracle is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP: Oracle currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 82 cents per share.

Zacks Rank: Oracle has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stock to Consider

A stock that can be considered at the moment as our model shows that it has the right combination of elements to post an earnings beat this quarter is

Avery Dennison Corporation (AVY - Analyst Report) withan earnings ESP of +1.15% and a Zacks Rank #3 (Hold).