Back to top

Image: Bigstock

Semtech (SMTC) to Report Q2 Earnings: What's in the Cards?

Read MoreHide Full Article

Semtech Corporation (SMTC - Free Report) is scheduled to report second-quarter fiscal 2022 results on Sep 1.

For the second quarter, the company expects net sales in the range of $177-$187 million. The Zacks Consensus Estimate for sales is pegged at $182.6 million, indicating an improvement of 27.1% from the year-ago reported value.

Further, it anticipates non-GAAP earnings per share in the range of 57-65 cents. The consensus mark for earnings per share is pegged at 62 cents, indicating a 44.2% rise from the previous-year reported figure.

It surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 3.2%.

Semtech Corporation Price and EPS Surprise

Semtech Corporation Price and EPS Surprise

Semtech Corporation price-eps-surprise | Semtech Corporation Quote

Key Factors to Note

Semtech’s fiscal second-quarter results are likely to reflect gains from the low power, high range (LoRa) business. Due to the cost-effective nature of LoRa technology, the company has been signing a number of contracts that are expected to have expanded the adoption of LoRa devices.

During the fiscal second quarter, its LoRaWAN connectivity has been integrated into SAS’ IoT analytics to provide Edge-to-Cloud IoT solutions for addressing specific problems like flood prevention, livestock wellness, precision agriculture and energy forecasting.

A South Korean company named LDT also incorporated Semtech’s LoRa devices into its smart fire prevention system. Additionally, Semtech collaborated with DIC for integrating its LoRaWAN standard with the latter’s HatteTotte sensors.

Semtech also partnered with eLichens, the national postal service of Switzerland, Swiss Post, SkyLab, InVue, and EchoStar’s (SATS - Free Report) subsidiary EchoStar Mobile during the quarter for its LoRa devices.

These efforts are likely to have driven top-line growth of the company in the fiscal second quarter.

Further, growing momentum of Tri-Edge PAM4 CDRs in 100-gig, 200-gig and 400-gig optical systems as well as FiberEdge PMD platforms is likely to have remained a tailwind.

Also, increasing demand across data center, PON and wireless base station businesses is anticipated to have contributed well to the to-be-reported quarter’s performance.

Furthermore, growing adoption of the company’s Protection platforms in mobile systems, and across broad-based industrial, automotive and communication systems is expected to have contributed well to revenues of the Protection Product Group.

Apart from these, Semtech’s collaboration with Intel (INTC - Free Report) for building optical semiconductor platforms for Light Detection and Ranging might have driven growth in the Signal Integrity Product Group’s revenues.

Yet, huge expenses related to a challenging global supply chain might have affected the quarterly performance. Further, Semtech’s soft demand from the infrastructure end market is likely to have remained a concern during the fiscal second quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Semtech 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Semtech has an Earnings ESP of 0.00% and a Zacks Rank #2, at present.

Stock to Consider

Here is a stock that you may consider as our model shows that it has the right combination of elements to beat on earnings this season.

Oracle Corporation (ORCL - Free Report) has an Earnings ESP of +0.34% and a Zacks Rank of 3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.