The Allstate Corporation (ALL - Analyst Report) is set to report first-quarter 2016 earnings results on May 4. Last quarter, it posted a positive earnings surprise of 20.3%. Let’s see how things are shaping up for this announcement.

Factors Affecting the Past Quarter

Allstate estimates first-quarter catastrophe loss, stemming from hailstorms, at around $538 million. This should affect the underwriting income and combined ratio in the to-be-reported quarter. Though strategic actions undertaken should improve auto insurance profitability, “one of the largest hailstorms to ever impact Allstate” should weigh on the same. However, Esurance and Allstate Benefits are likely to show improvement in the first quarter.

Initiatives to lower expenses should aid results. Share buybacks are likely to boost the bottom line. A strong foothold in the personal lines business should add to the top line. Also, pricing discipline, strong claim management and strategic acquisitions are likely to drive results in the Property-Liability segment.

With respect to the surprise trend, Allstate surpassed expectations in three of the last four quarters, resulting in an average positive surprise of 1.88%.

The company’s share price has been fluctuating over the last few days. We wait to see how the stock reacts to the quarter’s results.

Earnings Whispers

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

Zacks ESP: Allstate has an ESP of -3.49%. This is because the Most Accurate estimate stands at 83 cents and the Zacks Consensus Estimate is pegged at 86 cents per share.

Zacks Rank: Allstate has a Zacks Rank #3 (Hold). Though this increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult.

Stocks to Consider

Here are three stocks from the finance sector that have the right combination of elements to post an earnings beat this quarter:  

Prudential Financial, Inc (PRU - Analyst Report) has an Earnings ESP of +0.42% and a Zacks Rank #2. The company is scheduled to release first-quarter earnings results on May 4.

Lincoln National Corporation (LNC - Analyst Report) has an Earnings ESP of +0.67% and a Zacks Rank #3. The company is scheduled to release first-quarter earnings results on May 4.

Physicians Realty Trust (DOC - Snapshot Report) has an Earnings ESP of +4.35% and a Zacks Rank #3. The company is scheduled to report first-quarter earnings results on May 5.