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What's in Offing for United Microelectronics' (UMC) Q3 Earnings?

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United Microelectronics Corporation (UMC - Free Report) is slated to report third-quarter 2021 results on Oct 27.

For the third quarter, the Zacks Consensus Estimate for net sales is pegged at $1.99 billion, indicating growth of 28.7 % from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for third-quarter earnings currently stands at 19 cents per share, which suggests an improvement of 46.2% from the year-ago reported figure.

Factors at Play

United Microelectronics’ third-quarter performance is likely to have continued benefiting from a strong demand environment, increased pricing and full capacity utilization. During the last reported quarterly result, the company had projected a 1-2% quarter-on-quarter increase in the third-quarter wafer shipment. It had also anticipated a 6% sequential rise in the average selling price during the quarter under review.

The company’s growing efforts toward expanding its manufacturing capacities are anticipated to have aided in catering to the rising wafer demand. Prospects around the P6 program are expected to have been major positives.

The increasing use of the 28-nanometer (nm) wafer in digital TV, set-top box and connectivity chips designed for smartphones is likely to have fueled United Microelectronics’ 28 nm revenues in the quarter to be reported.

United Microelectronics’ ramping up initiatives toward 22 nm wafer is likely to get reflected in the upcoming results. The rising shipment of the 22-nm wafer is likely to have contributed to the wafer revenues of United Microelectronics.

Apart from this, the strong momentum across businesses associated with computer applications as well as consumer applications is anticipated to have aided the company’s third-quarter performance.

Nonetheless, the industry-wide supply-chain constraint is likely to have negatively impacted the company’s to be reported quarter’s overall performance. During its second-quarter earnings conference call, the company had stated that supply tightness across its 8-inch and 12-inch facilities will prevail in the near term.

Moreover, soft demand for the 40-nm technology is expected to have been a headwind for United Microelectronics. The weakening momentum across fabless customers might get reflected in the company’s third-quarter results.

What Our Model Says

Our proven model does not predict an earnings beat for United Microelectronics this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances 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.

Though United Microelectronics currently carries a Zacks Rank of 2, it has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:

Applied Materials (AMAT - Free Report) has an Earnings ESP of +0.52% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Micro Devices (AMD - Free Report) has an Earnings ESP of +2.31% and carries a Zacks Rank #2, at present.

CACI International (CACI - Free Report) has an Earnings ESP of +4.43% and holds a Zacks Rank of 2, currently.

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