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Applied Materials, Inc.(NASDAQ:(AMAT - Free Report) – Free Report) just reported its best quarter in its 50-year history. This Zacks Rank #1 (Strong Buy) is expected to see 82% earnings growth this fiscal year.
Applied Materials makes equipment and provides software and services for the semiconductor and display industries.
Another Beat in the Fiscal Third Quarter
On Aug 17, Applied Materials reported its fiscal third quarter results and beat the Zacks Consensus again. It reported earnings of $0.86 versus the consensus of $0.83. It's last earnings miss was all the way back in 2013.
It was a stellar quarter, with record revenue surging 33% to $3.74 billion. Gross margin also rose by 2.9 points to 46.6%.
The company also generated a quarterly record of $1.37 billion in cash from operations, and returned $482 million to shareholders in the form of dividends and share repurchases. The dividend currently yields 0.9%.
Analysts Raise Full Year Estimates Again
Most believed that fiscal 2017 was going to be a banner year, but the question is, can this pace keep up into fiscal 2018?
Applied seems to be indicating that the start to 2018 looks strong.
As a result, the analysts have been raising both fiscal 2017 and now fiscal 2018 estimates as well, although they're being cautiously optimistic about 2018.
7 estimates were raised for fiscal 2017 since the earnings report, pushing the 2017 consensus up to $3.19 versus $3.10 just a week ago. That's a gain of 82%.
But 2018 is starting to perk up as well. 7 estimates were raised in the last week for 2018 as well with that consensus rising to $3.54 from $3.28. That's earnings growth of 11%.
Bear:
The Andersons, Inc. (NASDAQ:(ANDE - Free Report) – Free Report) is still struggling to find the right mix in the agribusiness sector. This Zacks Rank #5 (Strong Sell) closed its retail stores but is getting hit as the nutrient business stays depressed.
The Andersons was founded in 1947 by Harold Anderson in Maumee, Ohio with a single grain elevator. It has grown into an agribusiness company with numerous business segments across North America, including in grain, ethanol, plant nutrient and rail.
A Second Quarter Earnings Miss
On Aug 3, The Andersons reported second quarter results and missed on the Zacks Consensus by 11 cents. Earnings were $0.54 compared to the consensus at $0.65.
It saw a net loss of $26.7 million, including $3.5 million in pretax costs associated with exiting its retail business.
The bright spot continues to be the Grain Group with saw significantly improved year-over-year results. The group continued to earn better space income.
Ethanol margins were lower year-over-year as supply outpaced demand.
In the Rail Group, utilization improved sequentially to 84.4% from 83.6% but is still under the year-ago quarter of 88.6%. However, the company is encourage by trends in the railroad industry that show some improvement.
But the Nutrient Group saw the most struggles as margins and volumes suffered due to persistently low prices and fieldwork delays during a key stretch of the primary fertilizer application window. There's no sign that the fertilizer market is going to be turning around soon.
Estimates Cut for 2017 and 2018
The analysts continue to be bearish on The Andersons as long as market conditions remain weak in several of its core areas.
The 2017 Zacks Consensus Estimate was slashed to $1.56 from $1.75 in the last week. While that's an improvement on the $0.41 it made in 2016, it's still down off of earlier bullish projections.
2018 is looking similar as the consensus was cut to $2.21 from $2.35 just 7 days ago.
Additional content:
3 Tech Stocks to Ride Post-Earnings Momentum
As Q2 earnings season comes to an end, it’s time for investors to reflect on our latest round of results and adjust their strategies accordingly. Overall, earnings were strong, and we saw broad-based growth reaching the double digit level for the second quarter in a row, which means investors should be moving from a position of strength right now.
Of course, the technology sector was an impressive performer once again. Tech stocks have been leading the way for most of 2017, and since the recent volatility in the space had no effect on the previous quarter’s earnings, we saw strong results across the board this season.
In fact, according to our exclusive Zacks Sector Rank data, about 70% of the companies in our “Computer and Technology” sector either met or surpassed earnings estimates this quarter. While that means you may have missed a few opportunities to profit from earnings surprises, there’s still plenty of time to ride the tech sector’s post-earnings momentum.
Analysts and large funds take time to digest earnings reports, so the window of opportunity actually stays open a little bit longer than one might think. What’s more, by targeting companies with strong Zacks Ranks and Style Scores, investors can ensure they are finding the best possible stocks in the wake of earnings season.
Check out these three tech stocks to ride the post-earnings momentum:
Nvidia, which is quickly turning into an investor favorite, posted earnings of $1.01 per share in the most recent quarter, surpassing the Zacks Consensus Estimate by a whopping 47%. Since then, positive estimate revisions have been pouring in, and now the company’s current-quarter Zacks Consensus Estimate sits 16 cents higher.
This revision activity has propelled the stock to a Zacks Rank #1 (Strong Buy), and its recent gains have helped it earn an “A” grade for Momentum. Nvidia shares are now up over 50% year-to-date, but the company’s impressive growth prospects could continue to push the stock higher. Looking ahead, Nvidia is poised to benefit even further from widespread adoption of AI technology, as it is an industry leader in this emerging market.
E-commerce marketplace Etsy reported earnings of 10 cents per share in the last quarter, smashing the Zacks Consensus Estimate that called for break-even results. Quarterly revenues were $102 million, ahead of our consensus estimate and up 20% from the year-ago period.
As a result, we’ve seen four positive revisions to Etsy’s current-quarter earnings estimates, moving our Zacks Consensus Estimate four cents higher. Now, the latest figures are calling for Etsy to post EPS growth of 310% this quarter. The company’s strong results and positive revision activity have earned the stock a Zacks Rank #2 (Buy), and it has also gained an “A” for Momentum in the wake of its report.
Arista Networks, a provider of cloud networking solutions for datacenters, has benefitted from the massive boom in this space. The company recently reported earnings of $1.34 per share, surpassing the Zacks Consensus Estimate of $0.95 by more than 40%. Furthermore, quarterly revenues of $405 million were well beyond our consensus estimate of $361 million and soared more than 50% year-over-year.
Within the last month, Arista has witnessed eight positive revisions to its current-quarter earnings estimates, which has lifted its Zacks Consensus Estimate by nine cents. The company’s stock has also moved more than 10% higher over that timeframe. ANET is now a Zacks Rank #1 (Strong Buy) with “A” grades for Momentum and Growth in our Style Scores system.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month. Learn the secret >>
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Applied Materials, The Andersons, Nvidia, Etsy and Arista Networks as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 23, 2017 – Zacks Equity Research highlights Applied Materials, Inc.(NASDAQ:(AMAT - Free Report) – Free Report) as the Bull of the Day The Andersons, Inc.(NASDAQ:(ANDE - Free Report) – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nvidia Corporation (NASDAQ:(NVDA - Free Report) – Free Report), Etsy, Inc. (NASDAQ:(ETSY - Free Report) – Free Report) and Arista Networks, Inc. (NYSE:(ANET - Free Report) – Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Applied Materials, Inc.(NASDAQ:(AMAT - Free Report) – Free Report) just reported its best quarter in its 50-year history. This Zacks Rank #1 (Strong Buy) is expected to see 82% earnings growth this fiscal year.
Applied Materials makes equipment and provides software and services for the semiconductor and display industries.
Another Beat in the Fiscal Third Quarter
On Aug 17, Applied Materials reported its fiscal third quarter results and beat the Zacks Consensus again. It reported earnings of $0.86 versus the consensus of $0.83. It's last earnings miss was all the way back in 2013.
It was a stellar quarter, with record revenue surging 33% to $3.74 billion. Gross margin also rose by 2.9 points to 46.6%.
The company also generated a quarterly record of $1.37 billion in cash from operations, and returned $482 million to shareholders in the form of dividends and share repurchases. The dividend currently yields 0.9%.
Analysts Raise Full Year Estimates Again
Most believed that fiscal 2017 was going to be a banner year, but the question is, can this pace keep up into fiscal 2018?
Applied seems to be indicating that the start to 2018 looks strong.
As a result, the analysts have been raising both fiscal 2017 and now fiscal 2018 estimates as well, although they're being cautiously optimistic about 2018.
7 estimates were raised for fiscal 2017 since the earnings report, pushing the 2017 consensus up to $3.19 versus $3.10 just a week ago. That's a gain of 82%.
But 2018 is starting to perk up as well. 7 estimates were raised in the last week for 2018 as well with that consensus rising to $3.54 from $3.28. That's earnings growth of 11%.
Bear:
The Andersons, Inc. (NASDAQ:(ANDE - Free Report) – Free Report) is still struggling to find the right mix in the agribusiness sector. This Zacks Rank #5 (Strong Sell) closed its retail stores but is getting hit as the nutrient business stays depressed.
The Andersons was founded in 1947 by Harold Anderson in Maumee, Ohio with a single grain elevator. It has grown into an agribusiness company with numerous business segments across North America, including in grain, ethanol, plant nutrient and rail.
A Second Quarter Earnings Miss
On Aug 3, The Andersons reported second quarter results and missed on the Zacks Consensus by 11 cents. Earnings were $0.54 compared to the consensus at $0.65.
It saw a net loss of $26.7 million, including $3.5 million in pretax costs associated with exiting its retail business.
The bright spot continues to be the Grain Group with saw significantly improved year-over-year results. The group continued to earn better space income.
Ethanol margins were lower year-over-year as supply outpaced demand.
In the Rail Group, utilization improved sequentially to 84.4% from 83.6% but is still under the year-ago quarter of 88.6%. However, the company is encourage by trends in the railroad industry that show some improvement.
But the Nutrient Group saw the most struggles as margins and volumes suffered due to persistently low prices and fieldwork delays during a key stretch of the primary fertilizer application window. There's no sign that the fertilizer market is going to be turning around soon.
Estimates Cut for 2017 and 2018
The analysts continue to be bearish on The Andersons as long as market conditions remain weak in several of its core areas.
The 2017 Zacks Consensus Estimate was slashed to $1.56 from $1.75 in the last week. While that's an improvement on the $0.41 it made in 2016, it's still down off of earlier bullish projections.
2018 is looking similar as the consensus was cut to $2.21 from $2.35 just 7 days ago.
Additional content:
3 Tech Stocks to Ride Post-Earnings Momentum
As Q2 earnings season comes to an end, it’s time for investors to reflect on our latest round of results and adjust their strategies accordingly. Overall, earnings were strong, and we saw broad-based growth reaching the double digit level for the second quarter in a row, which means investors should be moving from a position of strength right now.
Of course, the technology sector was an impressive performer once again. Tech stocks have been leading the way for most of 2017, and since the recent volatility in the space had no effect on the previous quarter’s earnings, we saw strong results across the board this season.
In fact, according to our exclusive Zacks Sector Rank data, about 70% of the companies in our “Computer and Technology” sector either met or surpassed earnings estimates this quarter. While that means you may have missed a few opportunities to profit from earnings surprises, there’s still plenty of time to ride the tech sector’s post-earnings momentum.
Analysts and large funds take time to digest earnings reports, so the window of opportunity actually stays open a little bit longer than one might think. What’s more, by targeting companies with strong Zacks Ranks and Style Scores, investors can ensure they are finding the best possible stocks in the wake of earnings season.
Check out these three tech stocks to ride the post-earnings momentum:
1. Nvidia Corporation (NASDAQ:NVDA – Free Report)
Nvidia, which is quickly turning into an investor favorite, posted earnings of $1.01 per share in the most recent quarter, surpassing the Zacks Consensus Estimate by a whopping 47%. Since then, positive estimate revisions have been pouring in, and now the company’s current-quarter Zacks Consensus Estimate sits 16 cents higher.
This revision activity has propelled the stock to a Zacks Rank #1 (Strong Buy), and its recent gains have helped it earn an “A” grade for Momentum. Nvidia shares are now up over 50% year-to-date, but the company’s impressive growth prospects could continue to push the stock higher. Looking ahead, Nvidia is poised to benefit even further from widespread adoption of AI technology, as it is an industry leader in this emerging market.
2. Etsy, Inc. (NASDAQ:ETSY – Free Report)
E-commerce marketplace Etsy reported earnings of 10 cents per share in the last quarter, smashing the Zacks Consensus Estimate that called for break-even results. Quarterly revenues were $102 million, ahead of our consensus estimate and up 20% from the year-ago period.
As a result, we’ve seen four positive revisions to Etsy’s current-quarter earnings estimates, moving our Zacks Consensus Estimate four cents higher. Now, the latest figures are calling for Etsy to post EPS growth of 310% this quarter. The company’s strong results and positive revision activity have earned the stock a Zacks Rank #2 (Buy), and it has also gained an “A” for Momentum in the wake of its report.
3. Arista Networks, Inc. (NYSE:ANET – Free Report)
Arista Networks, a provider of cloud networking solutions for datacenters, has benefitted from the massive boom in this space. The company recently reported earnings of $1.34 per share, surpassing the Zacks Consensus Estimate of $0.95 by more than 40%. Furthermore, quarterly revenues of $405 million were well beyond our consensus estimate of $361 million and soared more than 50% year-over-year.
Within the last month, Arista has witnessed eight positive revisions to its current-quarter earnings estimates, which has lifted its Zacks Consensus Estimate by nine cents. The company’s stock has also moved more than 10% higher over that timeframe. ANET is now a Zacks Rank #1 (Strong Buy) with “A” grades for Momentum and Growth in our Style Scores system.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month. Learn the secret >>
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.