Global medical devices company, St. Jude Medical, Inc. (STJ), is scheduled to report fourth-quarter and full-year 2014 financial numbers on Jan 28, before the opening bell.

Last quarter, the company reported earnings of 97 cents per share, which beat the Zacks Consensus Estimate by a penny. In fact, in all the past four quarters, St. Jude Medical’s earnings have outpaced the Zacks Consensus Estimate with an average beat of 1.81%.

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

Why a Likely Positive Surprise?

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

Zacks ESP:  St. Jude Medical has a positive Earnings ESP of +0.97%.That is because the Most Accurate estimate stands at $1.04 while the Zacks Consensus Estimate is pegged lower at $1.03. This is a very meaningful and leading indicator of a likely positive earnings surprise.

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

The combination of St. Jude Medical’s Zacks Rank #3 and +0.97% ESP makes us confident of an earnings beat.

What's Driving the Better-Than-Expected Earnings?

St. Jude Medical’s recently released preliminary fourth-quarter 2014 results reflect strong momentum at the company’s CardioMEMS technology and Atrial Fibrillation businesses. We also note that most of the segments are expected to report within or above the company’s previously issued guidance, which is a positive in our view.

St. Jude Medical estimates fourth-quarter revenues to grow 1% year over year to around $1.44 billion, which is in line with the current Zacks Consensus Estimate. Additionally, the company has reaffirmed its fourth-quarter adjusted earnings guidance in the previously issued range of $1.02–$1.04 per share. The current Zacks Consensus Estimate of $1.03 lies within the guided range.

We believe that strong momentum at the company’s CardioMEMS technology and Atrial Fibrillation businesses, an expanding and innovative product portfolio and aggressive share buyback programs are expected to lead to a positive earnings surprise in the to-be-reported quarter.

However, we note that the company’s top line will be considerably hurt from recent foreign currency movements. This St. Paul, MN-based company derives more than half of its revenues from international operations, primarily in Europe and Japan. The strong U.S. dollar against Japanese yen and some other Latin American currencies will continue to impede sales growth.

Other Stocks to Consider

St. Jude Medical is not the only company looking up this earnings season. We also see likely earnings beats coming from these three industry players:

AbbVie (ABBV) with an Earnings ESP of +1.18% and a Zacks Rank #2 (Buy).

Hologic (HOLX) with an Earnings ESP of +2.78% and a Zacks Rank #2.

Intersect ENT (XENT) with an Earnings ESP of +11.11% and a Zacks Rank #2.

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