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What's in Store for STMicroelectronics' (STM) Q4 Earnings?

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STMicroelectronics N.V. (STM - Free Report) is scheduled to report fourth-quarter 2021 results on Jan 27.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 70 cents per share, indicating growth of 11.1% from the year-ago reported figure.

The figure has moved 7.7% north over the past 30 days.

Recently, the company announced preliminary fourth-quarter results, with revenues of $3.56 billion, up 11.2% from the prior quarter. Further, the figure came above the previous revenue guidance of $3.4 billion.

STM surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched the same on another occasion, with the average surprise being 3.41%.

Let’s see how things have shaped up prior to the earnings announcement.

STMicroelectronics N.V. Price and EPS Surprise

STMicroelectronics N.V. Price and EPS Surprise

STMicroelectronics N.V. price-eps-surprise | STMicroelectronics N.V. Quote

Factors to Consider

Continuous demand for engaged customer programs in the personal electronics market is likely to have continued benefiting its fourth-quarter performance. Growing demand for smartphones and other connected devices like wearables, tablets, hearables, True Wireless Stereo headsets and game consoles is expected to have contributed to top-line growth.

Additionally, the company’s robust microcontrollers, sensors, power, analog and other connectivity products might have aided top-line growth in the quarter under review.

During the quarter, STMicroelectronics unveiled the ST31 secure microcontroller to facilitate advanced security for contact and contactless payment cards, ID cards, and transport ticketing. It also introduced the STEVAL-IOD04KT1 industrial-sensor kit to simplify the development of compact IO-Link (IEC 61131-9) sensors for fieldbus-independent point-to-point bi-directional communication. These initiatives are expected to have remained positives for the company.

Further, the increasing usage of electronic applications in smart cars and autonomous vehicles is expected to have fueled the company’s growth in the automotive market.

Also, expanding design wins for silicon carbide products are likely to have remained another growth catalyst for the automotive market in the to-be-reported quarter. During the quarter, STMicroelectronics introduced the third generation of STPOWER silicon-carbide MOSFETs for electric vehicles and industrial applications. This might have been a tailwind.

Yet, STMicroelectronics’s fourth-quarter performance is expected to have been affected by coronavirus-driven supply-chain disruptions that raised volatility in the semiconductor market. Also, reduced operations in Malaysia due to the ongoing pandemic are likely to have remained headwinds.

What Our Model Says

Our proven model predicts an earnings beat for STMicroelectronics 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

STMicroelectronics currently has a Zacks Rank #1 and an Earnings ESP of +3.57%.

Other Stocks to Consider

Here are some other stocks that you may also consider, as our model shows that these too have the right combination of elements to beat on earnings this season.

Endava (DAVA - Free Report) has an Earnings ESP of +1.70% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Endava is scheduled to release second-quarter fiscal 2022 results on Feb 16. The Zacks Consensus Estimate for DAVA’s earnings is pegged at 59 cents per share, suggesting an increase of 55.26% from the prior-year reported figure.

Monolithic Power Systems (MPWR - Free Report) has an Earnings ESP of +2.83% and a Zacks Rank #2 at present.

Monolithic Power Systems is set to report the fourth-quarter 2021 results on Feb 10. The Zacks Consensus Estimate for MPWR’s earnings is pegged at $1.87 per share, which suggests an increase of 42.75% from the prior-year reported figure.

Alphabet (GOOGL - Free Report) has an Earnings ESP of +7.33% and a Zacks Rank #3 at present.

Alphabet is scheduled to release the fourth-quarter 2021 results on Feb 1. The Zacks Consensus Estimate for GOOGL’s earnings is pegged at $26.69 per share, which suggests an increase of 19.69% from the prior-year reported figure.