Linear Technology (LLTC) Q1 Earnings: What's In The Cards?

Linear Technology (NASDAQ:LLTC) is set to report first-quarter fiscal 2017 results on Oct 11. Last quarter, the leading OEM of analog and mixed signal semiconductors posted a positive earnings surprise of 1.89%.

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

Factors to Consider

Linear’s fourth-quarter fiscal 2016 earnings of 54 cents exceeded the Zacks Consensus Estimate by a penny.

Also, revenues of $373.8 million were up 3.5% year over year but down 1.5% sequentially. The figure was slightly below the Zacks Consensus Estimate of $373.9 million and within the company’s guided range. Margins remained strong.

Linear’s business is well diversified among core markets, such as industrial, automotive and communications infrastructure. It will soon be acquired by Analog Devices in a cash and stock deal worth $14.8 billion. The merger of these two companies will create an analog industry leader across a huge range of products, customer breadth and scale.

However, weakness in PC and notebook markets could hit the computing business and dampen upcoming results.

Earnings Whispers

Our proven model does not show that Linear will beat on earnings this fiscal quarter. That is because 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. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 54 cents. Hence, the difference is 0.00%.

Zacks Rank: Linear has a Zacks Rank #4.

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

LINEAR TEC CORP Price and EPS Surprise

LINEAR TEC CORP Price and EPS Surprise | LINEAR TEC CORP Quote

Stocks to Consider

You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:

Intel Corporation (NASDAQ:INTC) with an Earnings ESP of +1.39% and a Zacks Rank #1. The company is slated to report third-quarter earnings results on Oct 18.

KLA-Tencor Corporation (NASDAQ:KLAC) with an Earnings ESP of +2.83% and a Zacks Rank #1. The company is slated to report first-quarter fiscal 2017 earnings results on Oct 19. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Micro Devices, Inc. (NASDAQ:AMD) has an Earnings ESP of +50.00% and a Zacks Rank #2. The company’s third-quarter earnings release date is Oct 20.

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