Applied Materials (NASDAQ:AMAT), Inc. AMAT is set to report fiscal third-quarter 2020 results on Aug 13. In the last reported quarter, it delivered an earnings surprise of 6.5%.
Applied Materials’ surprise history has been decent. The company surpassed earnings estimates in three of the trailing four quarters, while missed once, with the average being 3.8%.
For the fiscal third quarter, the Zacks Consensus Estimate for earnings has remained stable at 95 cents per share over the past 30 days. The figure indicates an increase of 28.4% from the year-ago quarter.
The consensus mark for revenues is pegged at $4.20 billion, implying an increase of 17.8% from the year-ago reported figure.
Performance in the Last Reported Quarter
In second-quarter fiscal 2020, earnings of 89 cents per share missed the Zacks Consensus Estimate by 2 cents. The figure declined 9.2% sequentially but increased 27% year over year.
Net sales of $3.96 billion missed the Zacks Consensus Estimate by 5.7%. However, the figure improved 11.9% from the year-ago period.
Let’s see how things have shaped up for this announcement.
The company’s fiscal third-quarter sales are expected to have benefited from portfolio strength, growing investments in new playbook, its expanding position in memory and increasing new design wins.
Also, the company might have gained from the integration of advanced machine learning capabilities across semiconductor fabs to enhance automated defect analysis. Persistent expansion of big data and the growth of other new computing technologies are likely to reflect on the upcoming results.
During the quarter, the global rollout of 5G mobile technology led to higher demand for semiconductor equipment, which is expected to have aided its top-line growth.
Further, growth opportunities across specialty nodes and the new nodes ramp across foundry, logic, NAND, and DRAM are expected to have benefited Applied Materials in the to-be-reported quarter. Moreover, inventory reductions across memory and demand elasticity in NAND are likely to have acted as tailwinds.
In addition, the company’s growing research and development activities, as well as innovative next generation products are likely to have aided the Display and Adjacent Markets segment performance in the quarter under review.
However, uncertainties related to the COVID-19 pandemic could impact its upcoming results.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Applied Materials this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Applied Materials has a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.
Deere & Company (NYSE:DE) DE has an Earnings ESP of +4.64% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Agilent Technologies (NYSE:A), Inc. A has an Earnings ESP of +5.00% and a Zacks Rank #2.
The Home Depot (NYSE:HD), Inc. HD has an Earnings ESP of +17.13% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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
Deere Company (DE): Free Stock Analysis Report
The Home Depot, Inc. (HD): Free Stock Analysis Report
Applied Materials, Inc. (AMAT): Free Stock Analysis Report
Agilent Technologies, Inc. (A): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research