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Semiconductor Stocks' Earnings on Jul 30: ON, IDTI & More
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The Q2 earnings cycle is in full swing with a number of semiconductor companies slated to report quarterly numbers over the next few days. The industry serves as a driver, enabler and indicator of technological progress.
According to the latest Earnings Preview, technology is one of the six sectors predicted to report double-digit earnings growth this quarter. Per the report, total earnings for the tech sector are projected to be up 24.5% on 11.4% higher revenues.
We note that the technology sector has been a robust performer over the past year. The sector has been benefiting from increasing demand for cloud-based platforms, growing adoption of Artificial Intelligence (AI) solutions, Augmented/Virtual reality devices, autonomous cars, advanced driver assisted systems (ADAS) and Internet of Things (IoT) related software.
We believe the aforementioned trends have provided some much-needed opportunity to semiconductor companies, which still consumes the bulk of the chips. Notably, according to the latest report of World Semiconductor Trade Statistics (“WSTS”), semiconductor revenues climbed 20.6% year over year to $408.7 billion in 2017.
The semiconductor industry is anticipated to continue to witness growth this year as well, although not as high as 2017 but still at a respectable rate. Per the WSTS report, semiconductor revenues are likely to touch $463 billion in 2018, representing growth of 12.4%.
The industry is poised to gain from rising demand for new technologies, deployment of 5G broadband technology globally and President Trump’s pro-business policies, including tax cuts, deregulation and outlays on infrastructure.
However, this does not ensure earnings beat for all companies in the space. It should be noted that a company’s earnings outperformance is dependent on the overall business environment as well as management’s ability to implement operating and strategic plans.
In other words, a company may perform dismally despite a favorable business environment if it fails to capitalize on the opportunities due to lack of execution.
Let’s see what’s in store for the following semiconductor stocks, all of which are slated to release quarterly figures on Jul 30.
ON Semiconductor Corporation (ON - Free Report) is scheduled to report second-quarter 2018 results. The Zacks Consensus Estimate for earnings is pegged at 45 cents per share while the same for revenues is at $1.43 million. The estimates compared with the year-ago quarter figures represent 73.1% and 6.9% increase in earnings and revenues, respectively. The stock carries a Zacks Rank #2 (Buy).
ON Semiconductor anticipates growth backed by robust demand for products in the automotive and industrial end markets. Specifically, power management and imaging products, which are gaining traction, remain a key catalyst.
Moreover, integration and optimization of Fairchild’s manufacturing operations is anticipated to boost its profitability. The company is already enjoying cross-selling opportunities to a combined customer base that is aiding its top-line.
ON Semiconductor Corporation Price and EPS Surprise
Next up is Integrated Device Technology, Inc. , which is set to report first-quarter 2019 results. The stock carries a Zacks Rank #2. The Zacks Consensus Estimate for the quarter under review is pegged at 43 cents, representing significant year-over-year growth of 30.3%. Additionally, analysts polled by Zacks project revenues of roughly $226.6 million, up 15.2% from the year-ago quarter.
IDT’s expanding product portfolio is a key growth driver. Additionally, it will continue to benefit from the robust performance of new sensor family, analog/mixed signal product family, advanced timing and memory interface products. Further, growing market for wireless power products remains a tailwind. IDT also remains confident on strong returns from its flagship memory interface business.
Another semiconductor company, Amkor Technology, Inc. (AMKR - Free Report) , is slated to report second-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $1.03 billion and 5 cents per share, indicating growth of 4.1% and a decline of 64.3%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3 (Hold).
Notably, the company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters, recording an average positive surprise of 13.7%.
The company has been making efforts to channelize its resources in important growth areas like automotive and increased investments in Greater China. In this regard, Amkor invested huge amounts in the Shanghai factory and Greater China sales team to attract more business.
Moreover, the company remains optimistic about growth in its automotive business. Per market forecast, the automotive market will grow in high-single digits in the coming years. Increasing electronic content is expected to drive growth. Given its attractive value proposition for automotive customers, the company is poised to benefit going ahead.
Rambus, Inc. (RMBS - Free Report) will report second-quarter 2018 results. Analysts covering the stock believe that strong adoption of an innovative portfolio will drive Rambus’ top-line in the to-be-reported quarter. Furthermore, partnerships continue to be one of the key growth catalysts. In the last few months, Rambus has entered into several collaborations.
The company is also taking up initiatives to strengthen its position in the Internet of Things (IoT) industry. The company’s CryptoManager IoT Security Service was adopted by Cybertrust Japan for its Cybertrust Secure IoT Platform. In our opinion, these deals will enhance its product offerings and bolster top and bottom-line performance in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $96.6 million and 20 cents per share, respectively, indicating growth of 2% and 42.9%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3.
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Image: Bigstock
Semiconductor Stocks' Earnings on Jul 30: ON, IDTI & More
The Q2 earnings cycle is in full swing with a number of semiconductor companies slated to report quarterly numbers over the next few days. The industry serves as a driver, enabler and indicator of technological progress.
According to the latest Earnings Preview, technology is one of the six sectors predicted to report double-digit earnings growth this quarter. Per the report, total earnings for the tech sector are projected to be up 24.5% on 11.4% higher revenues.
We note that the technology sector has been a robust performer over the past year. The sector has been benefiting from increasing demand for cloud-based platforms, growing adoption of Artificial Intelligence (AI) solutions, Augmented/Virtual reality devices, autonomous cars, advanced driver assisted systems (ADAS) and Internet of Things (IoT) related software.
We believe the aforementioned trends have provided some much-needed opportunity to semiconductor companies, which still consumes the bulk of the chips. Notably, according to the latest report of World Semiconductor Trade Statistics (“WSTS”), semiconductor revenues climbed 20.6% year over year to $408.7 billion in 2017.
The semiconductor industry is anticipated to continue to witness growth this year as well, although not as high as 2017 but still at a respectable rate. Per the WSTS report, semiconductor revenues are likely to touch $463 billion in 2018, representing growth of 12.4%.
The industry is poised to gain from rising demand for new technologies, deployment of 5G broadband technology globally and President Trump’s pro-business policies, including tax cuts, deregulation and outlays on infrastructure.
However, this does not ensure earnings beat for all companies in the space. It should be noted that a company’s earnings outperformance is dependent on the overall business environment as well as management’s ability to implement operating and strategic plans.
In other words, a company may perform dismally despite a favorable business environment if it fails to capitalize on the opportunities due to lack of execution.
Let’s see what’s in store for the following semiconductor stocks, all of which are slated to release quarterly figures on Jul 30.
ON Semiconductor Corporation (ON - Free Report) is scheduled to report second-quarter 2018 results. The Zacks Consensus Estimate for earnings is pegged at 45 cents per share while the same for revenues is at $1.43 million. The estimates compared with the year-ago quarter figures represent 73.1% and 6.9% increase in earnings and revenues, respectively. The stock carries a Zacks Rank #2 (Buy).
Notably, the company has missed the Zacks Consensus Estimate in two of the trailing four quarters, recording an average negative surprise of 9.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ON Semiconductor anticipates growth backed by robust demand for products in the automotive and industrial end markets. Specifically, power management and imaging products, which are gaining traction, remain a key catalyst.
Moreover, integration and optimization of Fairchild’s manufacturing operations is anticipated to boost its profitability. The company is already enjoying cross-selling opportunities to a combined customer base that is aiding its top-line.
ON Semiconductor Corporation Price and EPS Surprise
ON Semiconductor Corporation Price and EPS Surprise | ON Semiconductor Corporation Quote
Next up is Integrated Device Technology, Inc. , which is set to report first-quarter 2019 results. The stock carries a Zacks Rank #2. The Zacks Consensus Estimate for the quarter under review is pegged at 43 cents, representing significant year-over-year growth of 30.3%. Additionally, analysts polled by Zacks project revenues of roughly $226.6 million, up 15.2% from the year-ago quarter.
IDT’s expanding product portfolio is a key growth driver. Additionally, it will continue to benefit from the robust performance of new sensor family, analog/mixed signal product family, advanced timing and memory interface products. Further, growing market for wireless power products remains a tailwind. IDT also remains confident on strong returns from its flagship memory interface business.
IDT Corporation Price and EPS Surprise
IDT Corporation Price and EPS Surprise | IDT Corporation Quote
Another semiconductor company, Amkor Technology, Inc. (AMKR - Free Report) , is slated to report second-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $1.03 billion and 5 cents per share, indicating growth of 4.1% and a decline of 64.3%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3 (Hold).
Notably, the company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters, recording an average positive surprise of 13.7%.
The company has been making efforts to channelize its resources in important growth areas like automotive and increased investments in Greater China. In this regard, Amkor invested huge amounts in the Shanghai factory and Greater China sales team to attract more business.
Moreover, the company remains optimistic about growth in its automotive business. Per market forecast, the automotive market will grow in high-single digits in the coming years. Increasing electronic content is expected to drive growth. Given its attractive value proposition for automotive customers, the company is poised to benefit going ahead.
Amkor Technology, Inc. Price and EPS Surprise
Amkor Technology, Inc. Price and EPS Surprise | Amkor Technology, Inc. Quote
Rambus, Inc. (RMBS - Free Report) will report second-quarter 2018 results. Analysts covering the stock believe that strong adoption of an innovative portfolio will drive Rambus’ top-line in the to-be-reported quarter. Furthermore, partnerships continue to be one of the key growth catalysts. In the last few months, Rambus has entered into several collaborations.
The company is also taking up initiatives to strengthen its position in the Internet of Things (IoT) industry. The company’s CryptoManager IoT Security Service was adopted by Cybertrust Japan for its Cybertrust Secure IoT Platform. In our opinion, these deals will enhance its product offerings and bolster top and bottom-line performance in the to-be-reported quarter.
The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $96.6 million and 20 cents per share, respectively, indicating growth of 2% and 42.9%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3.
Rambus, Inc. Price and EPS Surprise
Rambus, Inc. Price and EPS Surprise | Rambus, Inc. Quote
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>