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Monolithic Power (MPWR) Q4 Earnings: What Lies in Store?

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Monolithic Power Systems, Inc. (MPWR - Free Report) is set to release fourth-quarter 2016 earnings on Feb 9. In the last quarter, the company reported a negative earnings surprise of 7.89%. We note that the company delivered negative earnings surprises in three out of the last four quarters at an average negative surprise of 3.03%.

Shares of Monolithic Power Systems have underperformed the broader Zacks Semiconductor Analog and Mixed industry over the last one year. While the industry gained 60.0%, the stock appreciated 57.9%.

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

Factors to Consider    

Monolithic Power Systems provides small, highly energy efficient, easy-to-use power solutions for systems found in industrial applications, telecom infrastructures, cloud computing, automotive, and consumer applications.

During the last reported quarter, the company’s revenues were in line with the Zacks Consensus Estimate. However, earnings missed the same.

In December, the company filed a lawsuit against Intersil Corporation over misappropriating confidential information related to the company and using the information to project the company’s circuit design and operations in a negative way on the Internet. This development certainly doesn’t bode well for its results in the soon-to-be reported quarter.

Earnings Whispers?

Our proven model does not conclusively show that Monolithic Power Systems is likely to beat earnings 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) for this to happen. That is not the case here, as you will see below.

Zacks ESP: Monolithic Power Systems’ Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 35 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Monolithic Power Systems carries a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.

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

Monolithic Power Systems, Inc. Price and EPS Surprise

Stocks to Consider

Here are some companies that, as per our model, that have the right combination of elements to post an earnings beat this quarter:

Applied Optoelectronics Inc. (AAOI - Free Report) with an Earnings ESP of +15.87% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carbonite, Inc. with an Earnings ESP of +100.00% and a Zacks Rank #1.

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