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Diodes (DIOD) to Report Q2 Earnings: What's in the Cards?

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Diodes (DIOD - Free Report) is slated to release second-quarter 2022 results on Aug 4.

For the second quarter, the company expects revenues of $500 million (+/-3%). The Zacks Consensus Estimate for revenues is pegged at 499.80 million, suggesting an improvement of 13.47% from the year-ago quarter’s reported figure.

The consensus mark for earnings remains unchanged over the past 30 days at $1.75 per share, indicating growth of 45.83% from the year-ago quarter reported figure.

Diodes’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.23%.

Diodes Incorporated Price and EPS Surprise

Diodes Incorporated Price and EPS Surprise

Diodes Incorporated price-eps-surprise | Diodes Incorporated Quote

Factors to Note

Diodes’ strong portfolio of products has positioned it well to capitalize on high-growth areas like IoT, home automation, smart infrastructure, smartphones, 5G, cloud computing, server, storage, data centers, connected cars, embedded systems and precision controls. This is likely to have contributed to the company’s second-quarter performance.

The company’s gross margin in the to-be-reported quarter is likely to have benefited from its growth in the automotive market, industrial market and rising adoption of high-margin products like Perion among customers.

Due to the company’s diversified product portfolio, Diodes undertook a total solution sales approach to provide customers in the semiconductor industry with specific solutions according to their requirements. This might have helped the company attract new customers and increase design win momentum in the to-be-reported quarter.

The company’s second-quarter performance is likely to have benefited from expanded factory utilization and increased fab capacity. Diode’s recent acquisition of the onsemi South Portland, Maine Wafer Fabrication Facility and Operation provided an additional 200-millimeter wafer production capacity. This may have aided the company in meeting certain backlogs in automotive and industrial end markets.

However, due to COVID-related lockdowns in China, the supply chain constraint has increased, which is likely to have weighed on the company’s second-quarter top line.

What Our Model Says

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.

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

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Axcelis Technologies (ACLS - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axcelis’ shares have fallen 5.8% in the year-to-date period compared with the Zacks Electronics - Manufacturing Machinery industry’s decline of 24.2%.

Ballard Power Systems (BLDP - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #3.

Ballard’s shares have fallen 37.8% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Components industry’s decline of 18.1%.

Blink Charging (BLNK - Free Report) has an Earnings ESP of +4.23% and a Zacks Rank #2.

BLNK’s shares have decreased 16.8% in the year-to-date period compared with the Zacks Electronics - Miscellaneous Services industry’s decline of 15.5%.

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