Earnings releases are picking up momentum and results from 126 S&P 500 members or 32.7% of the index’s total market capitalization are already out (as of Jul 22).
So far, total earnings of these 126 index members are down 1.1% year over year on 2.6% lower revenues. However, the beat ratios are not all bad with 70.6% beating EPS estimates and 55.6% coming in ahead of top-line expectations.
For the technology sector, we have Q2 results from 38% of the sector’s total market capitalization in the S&P 500 index. So far, total earnings are down 0.2% year over year on 6.3% lower revenues, with 84.6% beating EPS estimates and an equal proportion beating revenue expectations.
A few semiconductor companies are slated to report their earnings on Jul 28. The industry has been struggling since the last year due a slowdown in China, strengthening dollar and a secular decline in the PC market.
So, let’s take a sneak peek into how Synaptics Inc. (NASDAQ:SYNA) , Cabot Microelectronics Corp. (NASDAQ:CCMP) , Pixelworks Inc. (NASDAQ:PXLW) and Intersil Corporation (NASDAQ:ISIL) are poised ahead of their releases.
Synaptics is a leading developer of human interface solutions for a wide variety of mobile computing and communications devices and is the leading supplier of TouchPads to the notebook computer market.
For the quarter, this Zacks Rank #3 (Hold) stock has an Earnings ESP of -44.44%. The Zacks Consensus Estimate for the quarter is pegged at 9 cents.
Last quarter, the company posted a negative earnings surprise of 24.79%. In the preceding four quarters, Synaptics matched the consensus mark twice and missed it on two other occasions, leading to a negative average surprise of 8.50%.
Weakness in the PC market, declining iPhone sales and overall softness in the high-end smartphone market are proving to be headwinds to Synaptics’ revenue growth. Furthermore, intensifying competition and ongoing troubles in the Chinese economy can prove to be a concern for the company as it derives a significant portion of its revenues from the region.
To battle the odds, the company is focussing on cost cutting and has recently slashed 9% of its workforce. It has also closed multiple offices. A buyout (speculated) and a strong shareholder repurchase plan could improve its financials. However, strategic acquisitions like that of Renesas SP Drivers, which has greatly expanded its offerings, are positives. (Read more: Will Synaptics Disappoint Again in Q4 Earnings?)
Cabot Microelectronics is a leading supplier of slurries used in chemical mechanical planarization, a polishing process used in the manufacturing of integrated circuit devices.
For the quarter, this Zacks Rank #3 stock has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 61 cents.
Last quarter, the company posted a negative earnings surprise of 10.87%. Cabot Microelectronics has exceeded the consensus mark twice and missed it twice in the preceding four quarters resulting in a positive average surprise of 1.54%.
CABOT MICROELEC Price and EPS Surprise
CABOT MICROELEC Price and EPS Surprise | CABOT MICROELEC Quote
Pixelworks designs, develops and markets semiconductors and software that enable the visual display of broadband content through a wide variety of electronic devices.
For the quarter, Pixelworks has an Earnings ESP of +9.09%. It carries a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for the quarter is pegged at a loss of 11 cents.
Last quarter, the company posted a positive earnings surprise of 15.79%. In fact, the company has a good track record of beating estimates as it exceeded the consensus mark in each of the preceding four quarters, resulting in an average beat of 22.48%.
Intersil is a leader in the design and manufacture of high-performance analog semiconductors.
For the quarter, the company has an Earnings ESP of 0.00%. It currently carries a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at 12 cents.
Last quarter, the company posted a negative earnings surprise of 8.33%. Intersil has beaten earnings in two of the last four quarters with an average beat of 20.97%.
SYNAPTICS INC (SYNA): Free Stock Analysis Report
CABOT MICROELEC (CCMP): Free Stock Analysis Report
PIXELWORKS INC (PXLW): Free Stock Analysis Report
INTERSIL CORP (ISIL): Free Stock Analysis Report
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