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What's in the Cards for STMicroelectronics' (STM) Q2 Earnings?

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STMicroelectronics N.V. (STM - Free Report) is scheduled to report second-quarter 2022 results on Jul 28.

For the second quarter, the company expects net revenues of $3.75 billion at the mid-point, indicating growth of 25.3% from the year-ago reported figure. The Zacks Consensus Estimate for revenues is pegged at $3.76 billion, implying a 25.6% year-over-year rise.

The consensus mark for earnings is pegged at 81 cents per share, indicating growth of 84.1% from the year-ago reported figure. The metric has been unchanged over the past 30 days.

STM surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same on the other occasion, with the average surprise being 10.11%.

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

Solid demand for the company’s robust microcontrollers, sensors, power, analog and other connectivity products is likely to have driven its top-line growth in the industrial market in the quarter under review.

The growing uptake of motion and environmental sensors, time-of-flight ranging sensors, wireless charging products, touch display controllers, and secure solutions in smartphones is anticipated to have aided its performance in the personal electronics market in the second quarter.

The strong momentum in design wins of smartwatches and other wearables is likely to have been another positive.

Increasing demand in the automotive product group across all geographies is likely to have aided STM’s performance in the to-be-reported quarter. Growing electrification and digitalization of the automotive industry are expected to have been a tailwind. Strong design wins, with ST power modules in electronic vehicle applications, are likely to have driven its growth in the automotive market in the to-be-reported quarter.

Strengthening customer engagements in cellular and satellite communication infrastructure are expected to have aided STM’s performance in the communications equipment, computer and peripherals market in the quarter under review.

All the above-mentioned factors are anticipated to have affected the overall second-quarter performance of the company.

However, the coronavirus-induced supply-chain disruptions in the semiconductor market are expected to have impacted STMicroelectronics’ quarterly performance negatively.

Mounting expenses are likely to have been another headwind in the quarter under discussion.

What Our Model Says

Our proven model does not conclusively predict 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 has an Earnings ESP of +0.82% and a Zacks Rank #4 (Sell).

Stocks to Consider

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

KLA Corporation (KLAC - Free Report) has an Earnings ESP of +0.15% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

KLA is scheduled to release fourth-quarter fiscal 2022 results on Jul 28. The Zacks Consensus Estimate for KLAC’s earnings is pegged at $5.46 per share, suggesting an increase of 23.2% from the prior-year reported figure.

Advanced Micro Devices (AMD - Free Report) has an Earnings ESP of +2.14% and a Zacks Rank #3 at present.

Advanced Micro Devices is set to report second-quarter 2022 results on Aug 2. The Zacks Consensus Estimate for AMD’s earnings is pegged at $1.03 per share, which suggests an increase of 63.5% from the prior-year reported figure.

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

Aspen Technology is set to report fourth-quarter fiscal 2022 results on Aug 8. The Zacks Consensus Estimate for ASPN’s earnings is pegged at $2.15 per share, which suggests an increase of 40.5% from the prior-year period’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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