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What's in Store for United Microelectronics' (UMC) Q2 Earnings?

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United Microelectronics (UMC - Free Report) is slated to report second-quarter 2021 results on Jul 27.

The Zacks Consensus Estimate for second-quarter earnings currently stands at 33 cents per share, which has remained unchanged over the past 30 days, suggests an improvement of 83.33% from the year-ago reported figure.

The consensus mark for second-quarter net sales is pegged at $2.32 billion, indicating growth of 26.93% from the year-ago quarter’s reported figure.

Factors to Note

United Microelectronics’ second-quarter performance is likely to have continued benefiting from a strong wafer demand, which kept fab utilization at full capacity. Higher pricing capacity may have lifted overall revenues.

In the last reported quarterly results, the company had projected a 4-5% quarter-on-quarter increase in the second-quarter wafer shipment. United Microelectronics had anticipated a 3-4% sequential rise in average selling price in the quarter to be reported.

The company’s growing efforts to concentrate on specialty technologies like non-volatile memory, power management, RFSOI and OLED display driver to support 5G, IoT and automotive mega-trends may have favored the to-be-reported quarter’s top line. United Microelectronics’ specialty technologies have been attracting new customers who are forming long-term partnerships with the company.

The company has been expanding its Fab 12A P5, which would help it to meet 28 nanometer supply backlogs. In order to meet the rising demand for 22/28 nanometer, the company has been broadening its Fab capacity in Singapore and has secured multi-year supply agreements. This, in turn, might get reflected in the to-be-reported quarter’s results.

However, rising supply chain constraints due to geopolitical tensions may have negatively impacted the company’s overall performance in the to-be-reported quarter.

Soft demand for the 40-nm technology is expected to have acted as a headwind for United Microelectronics. The weakening momentum across fabless customers might get reflected in the company’s second-quarter results.

What Our Model Indicates

Per the Zacks model, 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.

United Microelectronics has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here is a company worth considering, as our model shows that it has the right combination of elements to beat on earnings in its upcoming release:

Dell Technologies (DELL - Free Report) has an Earnings ESP of +5.81% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dell’s shares have fallen 20.5% in the year-to-date period compared with the Zacks Computers - IT Services industry’s decline of 31.6%.

Aspen Technology (AZPN - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2.

Aspen’s shares have returned19.7% in the year-to-date period compared with the Zacks Internet - Software industry’s decline of 47.3%.

Ballard Power Systems (BLDP - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #2.

Ballard’s shares have fallen 41.9% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Components industry’s decline of 24.6%.