Ligand Pharmaceuticals Incorporated LGND is scheduled to report first-quarter 2016 results on May 4 before the market opens. In the last reported quarter, Ligand had posted a positive earnings surprise of 1.96%. Let’s see how things are shaping up for this quarter.Factors to ConsiderLigand generates revenues in the form of royalties, license and milestone payments and sale of Captisol material. The company’s Captisol formulation technology has allowed it to enter into several licensing deals and generate royalties. While royalties depend on sales of its two key partnered assets – Kyprolis and Promacta, Captisol material sales depend on the timing of its purchases for clinical and commercial use.First quarter royalties should be driven by the strong growth of Promacta and Kyprolis. The Jan 2016 OMT acquisition will also drive results as it is expected to be immediately accretive. The acquisition diversified Ligand's business by adding an antibody-generating platform, OmniAb, and has also created a strong platform for the company to seek new licenses and partnerships and the potential to earn royalties.At the time of announcing fourth-quarter 2015 results, Ligand had raised its outlook for 2016 for both earnings and revenues. Ligand expects to earn $3.37–$3.42 per share (old guidance: $3.33–$3.38 per share) on total revenues of $114–$118 million (old guidance: $113–$117 million) in 2016. About 40% of revenues and earnings will be booked in the first half of 2016.While royalties will account for 50% of revenues, the balance will be generated equally by Captisol and license and milestone payments. About $10 million of license and milestone payments depend on product approvals expected in 2016.In Mar 2016, Ligand earned a $6 million payment from Spectrum Pharmaceuticals, Inc. SPPI on the FDA approval of Evomela.Operating expenses vary on a quarterly basis depending mainly on the timing of costs associated with internal programs and business development activities.Surprise HistoryLigand has an impressive earnings track record with the company surpassing expectations in each of the last four quarters delivering an average positive surprise of 44.15%. Earnings Whispers?Our proven model does not conclusively show that Ligand is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to announce an earnings surprise. That is not the case here as you will see below.Zacks ESP: The Earnings ESP for Ligand is 0.00% since the Most Accurate estimate stands at 46 cents per share, in line with the Zacks Consensus Estimate.Zacks Rank: Ligand carries a Zacks Rank #3. Ligand’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.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.Stocks That Warrant a LookHere are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.Amicus Therapeutics, Inc. FOLD has an Earnings ESP of +2.86% and carries a Zacks Rank #3. It is scheduled to report first-quarter results on May 3.The Earnings ESP for BIND Therapeutics, Inc. BIND is +7.14% and it carries a Zacks Rank #3. The company is expected to release first-quarter results on May 5.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report LIGAND PHARMA-B (LGND): Free Stock Analysis Report AMICUS THERAPT (FOLD): Free Stock Analysis Report BIND THERAPEUTC (BIND): Free Stock Analysis Report SPECTRUM PHARMA (SPPI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research