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Semiconductor stocks have been one of the best performing groups this year. The PHLX SOX Semiconductor Sector Index is up about 35% this year, beating the broader technology sector’s return of 24.5% and S&P 500’s return of 13.9%.
About the Company
Headquartered in Santa Clara, CA, Applied Materials (Nasdaq:(AMAT - Free Report) – Free Report) is a leading equipment supplier to the global semiconductor industry. They have been the industry leader for over twenty years.
Their equipment is mainly used in the manufacturing of semiconductors, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules.
Impressive Results and Raised Guidance
The company reported excellent results for Q3 FY 2017, beating our estimates on both the top and bottom lines. The pro forma earnings of 86 cents per share beat the Zacks Consensus Estimate by 3 cents and were also toward the higher end of the guided range. It was the company’s best quarter in its 50-year history.
“With revenue and profits at all-time highs, Applied has tremendous momentum and a very positive outlook for the future,” said the CEO. “Our markets are growing with a broader set of demand drivers, and the breadth of Applied’s technology enables us to play a larger and more valuable role advancing the innovation roadmap in semiconductor and display.”
The management also provided its guidance for the fourth quarter, which was better than consensus.
Surging Estimates
After strong results, analysts have been raising their estimates for the company. Zacks Consensus Estimates for the current and next year have surged to $3.23 per share and $3.68 per share, from $3.10 and $3.28 respectively, before the results.
Rising estimates sent the stock to a Zacks Rank # 1 (Strong Buy). The company has an excellent record of beating estimates. They have missed only once in the past five years.
Founded in 1948 and headquartered in Pittsburgh, PA, DICK’s Sporting Goods (NYSE:(DKS - Free Report) – Free Report) is a full-line sporting goods retailer. The company offers athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, water sports, etc.
Disappointing Results
The company posted Q2 FY2017 adjusted earnings of 96 cents per share, which missed the Zacks Consensus Estimate of $1.00 and were also below the company’s guidance range of $1.02–$1.07 per share. Consolidated comps also missed the company’s forecast of 2-3% increase.
The company also cut its fiscal 2017 guidance. They now expect adjusted earnings in the range of $2.80-$3 per share compared with $3.65-$3.75, guided earlier.
Falling Estimates
Analysts have lowered their estimates significantly after disappointing results and guidance. Zacks Consensus Estimates for the current and next fiscal year have plunged to $2.92 per share and $2.88 per share from $3.60 and $3.92 respectively, before the results.
The Bottom Line
Most retailers are going through a lot of pain thanks to the rising trend for online shopping, particularly on Amazon. The stock is now down about 55% year-to-date but a rebound doesn’t appear likely anytime soon given Zacks stock rank of #5 (Strong Sell) and industry and sector ranks in the bottom 14% and 13% respectively.
Additional content:
Upcoming Earnings Reports to Watch: Netflix, IBM and United
Thanks to the recent announcements from the big financial firms, Q3 earnings season is officially underway. Next week, the report season will really heat up as several of our most popular consumer brands will announce their latest quarterly results.
In fact, 56 companies in the S&P 500 will release earnings reports next week, making it the first busy stretch of what should be an integral wave of Q3 results. Total Q3 earnings for the S&P 500 are expected to be up 1.2% year-over-year, which is on track to be the slowest period this year. Still, investors can expect a plethora of great reports this season, and we at Zacks will be here to cover all of them.
For more on what investors should expect from Q3 earnings, check out our exclusive Earnings Trends report. This full report includes a variety of key historical results, as well as estimates for the current and upcoming periods.
And as earnings season gets underway, investors should also remember that they can always use the Zacks Earnings Calendar to plan out their schedules for earnings, dividend announcements, and other important financial releases. This handy tool is your perfect one-stop-shop to properly prepare for the market events that will have an impact on your own portfolio.
Today, we’ve made that task even easier for you. Using the Earnings Calendar, we looked ahead to next week and selected the biggest reports to watch. Make sure to keep an eye on these companies as they prepare to report during the week of October 16.
Video streaming behemoth Netflix will report its third-quarter results after the market closes on October 16. The company is coming off a rare earnings miss in Q2, but shares are up more than 58% year-to-date, and the earnings and revenue growth picture is still exciting. NFLX is currently a Zacks Rank #2 (Buy).
Based on our latest consensus estimates, we expect Netflix to report earnings of 32 cents per share and revenues of $2.97 billion. These results would represent year-over-year growth of 165% and 30%, respectively. Management has also projected 0.75 million domestic subscriber adds and 3.65 million international adds in the quarter. Investors should keep a close eye on the company’s international margins as it looks to operate more efficiently overseas.
IT services giant IBM is slated to release its third-quarter earnings report after the closing bell on October 17. IBM’s transition away from a hardware focus has led to disappointing revenue results over the past few years, but growth in cloud, mobile, and security products could fuel a turnaround. Still, shares are down more than 11% on the year, and the stock is sporting a Zacks Rank #3 (Hold).
According to our latest consensus estimates, IBM is projected to post earnings of $3.28 per share and revenues of $18.67 billion, which would represent year-over-year slumps of 0.3% and 3%, respectively. Management has warned that seasonality concerns will hurt revenues, but the company’s Mainframe z14 product and services contracts should pitch in more.
Plagued by public relations nightmares and damage from natural disasters, United is heading into its report date like a wounded bird. The company will announce its full third-quarter results after the market closes on October 18, but this Zacks Rank #5 (Strong Sell) has already warned that Q3 was noticeably rough.
Our current consensus estimates are calling for earnings of $1.87 per share and revenues of $9.84 billion. These figures would represent year-over-year drops of 40% and 0.75%, respectively. Houston is United’s second-largest hub, and Hurricane Harvey caused the company significant headwinds. Investors will want to hear how management plans on recovering from this short-term problem and preparing for a strong future.
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/performance for information about the performance numbers displayed in this press release.
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Applied Materials, DICK's Sporting Goods, Netflix, IBM and United Continental Holdings highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 16, 2017 – Zacks Equity Research Applied Materials (Nasdaq:(AMAT - Free Report) – Free Report) as the Bull of the Day, DICK’s Sporting Goods (NYSE:(DKS - Free Report) – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Netflix (Nasdaq:(NFLX - Free Report) – Free Report), IBM (NYSE:(IBM - Free Report) – Free Report) and United Continental Holdings (NYSE:(UAL - Free Report) – Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Semiconductor stocks have been one of the best performing groups this year. The PHLX SOX Semiconductor Sector Index is up about 35% this year, beating the broader technology sector’s return of 24.5% and S&P 500’s return of 13.9%.
About the Company
Headquartered in Santa Clara, CA, Applied Materials (Nasdaq:(AMAT - Free Report) – Free Report) is a leading equipment supplier to the global semiconductor industry. They have been the industry leader for over twenty years.
Their equipment is mainly used in the manufacturing of semiconductors, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules.
Impressive Results and Raised Guidance
The company reported excellent results for Q3 FY 2017, beating our estimates on both the top and bottom lines. The pro forma earnings of 86 cents per share beat the Zacks Consensus Estimate by 3 cents and were also toward the higher end of the guided range. It was the company’s best quarter in its 50-year history.
“With revenue and profits at all-time highs, Applied has tremendous momentum and a very positive outlook for the future,” said the CEO. “Our markets are growing with a broader set of demand drivers, and the breadth of Applied’s technology enables us to play a larger and more valuable role advancing the innovation roadmap in semiconductor and display.”
The management also provided its guidance for the fourth quarter, which was better than consensus.
Surging Estimates
After strong results, analysts have been raising their estimates for the company. Zacks Consensus Estimates for the current and next year have surged to $3.23 per share and $3.68 per share, from $3.10 and $3.28 respectively, before the results.
Rising estimates sent the stock to a Zacks Rank # 1 (Strong Buy). The company has an excellent record of beating estimates. They have missed only once in the past five years.
Bear of the Day:
Founded in 1948 and headquartered in Pittsburgh, PA, DICK’s Sporting Goods (NYSE:(DKS - Free Report) – Free Report) is a full-line sporting goods retailer. The company offers athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, water sports, etc.
Disappointing Results
The company posted Q2 FY2017 adjusted earnings of 96 cents per share, which missed the Zacks Consensus Estimate of $1.00 and were also below the company’s guidance range of $1.02–$1.07 per share. Consolidated comps also missed the company’s forecast of 2-3% increase.
The company also cut its fiscal 2017 guidance. They now expect adjusted earnings in the range of $2.80-$3 per share compared with $3.65-$3.75, guided earlier.
Falling Estimates
Analysts have lowered their estimates significantly after disappointing results and guidance. Zacks Consensus Estimates for the current and next fiscal year have plunged to $2.92 per share and $2.88 per share from $3.60 and $3.92 respectively, before the results.
The Bottom Line
Most retailers are going through a lot of pain thanks to the rising trend for online shopping, particularly on Amazon. The stock is now down about 55% year-to-date but a rebound doesn’t appear likely anytime soon given Zacks stock rank of #5 (Strong Sell) and industry and sector ranks in the bottom 14% and 13% respectively.
Additional content:
Upcoming Earnings Reports to Watch: Netflix, IBM and United
Thanks to the recent announcements from the big financial firms, Q3 earnings season is officially underway. Next week, the report season will really heat up as several of our most popular consumer brands will announce their latest quarterly results.
In fact, 56 companies in the S&P 500 will release earnings reports next week, making it the first busy stretch of what should be an integral wave of Q3 results. Total Q3 earnings for the S&P 500 are expected to be up 1.2% year-over-year, which is on track to be the slowest period this year. Still, investors can expect a plethora of great reports this season, and we at Zacks will be here to cover all of them.
For more on what investors should expect from Q3 earnings, check out our exclusive Earnings Trends report. This full report includes a variety of key historical results, as well as estimates for the current and upcoming periods.
And as earnings season gets underway, investors should also remember that they can always use the Zacks Earnings Calendar to plan out their schedules for earnings, dividend announcements, and other important financial releases. This handy tool is your perfect one-stop-shop to properly prepare for the market events that will have an impact on your own portfolio.
Today, we’ve made that task even easier for you. Using the Earnings Calendar, we looked ahead to next week and selected the biggest reports to watch. Make sure to keep an eye on these companies as they prepare to report during the week of October 16.
1. Netflix (Nasdaq:(NFLX - Free Report) – Free Report)
Video streaming behemoth Netflix will report its third-quarter results after the market closes on October 16. The company is coming off a rare earnings miss in Q2, but shares are up more than 58% year-to-date, and the earnings and revenue growth picture is still exciting. NFLX is currently a Zacks Rank #2 (Buy).
Based on our latest consensus estimates, we expect Netflix to report earnings of 32 cents per share and revenues of $2.97 billion. These results would represent year-over-year growth of 165% and 30%, respectively. Management has also projected 0.75 million domestic subscriber adds and 3.65 million international adds in the quarter. Investors should keep a close eye on the company’s international margins as it looks to operate more efficiently overseas.
2. IBM (NYSE:(IBM - Free Report) – Free Report)
IT services giant IBM is slated to release its third-quarter earnings report after the closing bell on October 17. IBM’s transition away from a hardware focus has led to disappointing revenue results over the past few years, but growth in cloud, mobile, and security products could fuel a turnaround. Still, shares are down more than 11% on the year, and the stock is sporting a Zacks Rank #3 (Hold).
According to our latest consensus estimates, IBM is projected to post earnings of $3.28 per share and revenues of $18.67 billion, which would represent year-over-year slumps of 0.3% and 3%, respectively. Management has warned that seasonality concerns will hurt revenues, but the company’s Mainframe z14 product and services contracts should pitch in more.
3. United Continental Holdings (NYSE:(UAL - Free Report) – Free Report)
Plagued by public relations nightmares and damage from natural disasters, United is heading into its report date like a wounded bird. The company will announce its full third-quarter results after the market closes on October 18, but this Zacks Rank #5 (Strong Sell) has already warned that Q3 was noticeably rough.
Our current consensus estimates are calling for earnings of $1.87 per share and revenues of $9.84 billion. These figures would represent year-over-year drops of 40% and 0.75%, respectively. Houston is United’s second-largest hub, and Hurricane Harvey caused the company significant headwinds. Investors will want to hear how management plans on recovering from this short-term problem and preparing for a strong future.
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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/performance for information about the performance numbers displayed in this press release.