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Will Top-Line Decline Affect InterDigital (IDCC) Q4 Earnings?
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InterDigital, Inc. (IDCC - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 15, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 68.2%. IDCC pulled off a trailing four-quarter earnings surprise of 69.3%, on average. Despite securing projects and strengthening its business portfolio, the company is likely to have witnessed lower revenues year over year due to high research and development costs, geopolitical unpredictability and macroeconomic uncertainty.
Factors at Play
During the fourth quarter, InterDigital announced its collaboration with Royal Phillips to develop MPEG Visual Volumetric Video-based Coding (V3C) immersive codecs to enhance telepresence and XR-driven experiences. High bandwidth and compression are required for volumetric content to attain data rates that are economically viable and sustainable and MPEG V3C is crucial to ensure this. InterDigital’s technical know-how on immersive codecs, including V3C Systems and V-PCC and MIV extensions blended with Royal Phillips’ six degrees of freedom (6DoF) immersive codec technologies, will ensure a more realistic immersive experience. This collaboration is evidence of the scale and depth of InterDigital's research capabilities in the area, enhancing its capacity for commercial expansion. This is likely to have a positive impact in fourth-quarter earnings.
During the December quarter, InterDigital was awarded five Horizon Europe flagship projects that focused on advancing 6G technology and infrastructure in Europe. EU’s Smart Networks and Services Joint Undertaking (SNS JU) is looking to utilize InterDigital’s rich heritage and expertise in wireless research and innovation to build the fundamentals and shape the 6G developments. These projects include a range of objectives like ensuring high predictability of the 6G network and enhancing reliability and time sensitivity by developing an AI-powered Digital Twin framework, matching the extreme bandwidth, latency and energy requirements for 6G, infrastructure development for evaluating 6G technologies, components etc. The deal is a proof of the company’s strong portfolio of wireless technology solutions and is likely to have cushioned top-line performance in the fourth quarter.
However, a highly-competitive market associated with ever-growing research and development expenditures is likely to have hurt the company’s earnings prospects in the fourth quarter. Also, rising tension between the United States and China and macroeconomic uncertainty may have affected the company’s revenues as well.
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $108 million, which indicates a decline of 3.6% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 79 cents, suggesting an improvement from the prior-year quarter’s reported figure of 70 cents.
Earnings Whispers
Our proven model predicts an earnings beat for InterDigital in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 17.20%, with the former pegged at $92 and the latter at 79 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Universal Display Corporation (OLED - Free Report) is +1.06% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 23.
The Earnings ESP for Splunk Inc. is +0.39% and it carries a Zacks Rank of 2 (Buy). The company is set to report quarterly numbers on Mar 1.
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Will Top-Line Decline Affect InterDigital (IDCC) Q4 Earnings?
InterDigital, Inc. (IDCC - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 15, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 68.2%. IDCC pulled off a trailing four-quarter earnings surprise of 69.3%, on average. Despite securing projects and strengthening its business portfolio, the company is likely to have witnessed lower revenues year over year due to high research and development costs, geopolitical unpredictability and macroeconomic uncertainty.
Factors at Play
During the fourth quarter, InterDigital announced its collaboration with Royal Phillips to develop MPEG Visual Volumetric Video-based Coding (V3C) immersive codecs to enhance telepresence and XR-driven experiences. High bandwidth and compression are required for volumetric content to attain data rates that are economically viable and sustainable and MPEG V3C is crucial to ensure this. InterDigital’s technical know-how on immersive codecs, including V3C Systems and V-PCC and MIV extensions blended with Royal Phillips’ six degrees of freedom (6DoF) immersive codec technologies, will ensure a more realistic immersive experience. This collaboration is evidence of the scale and depth of InterDigital's research capabilities in the area, enhancing its capacity for commercial expansion. This is likely to have a positive impact in fourth-quarter earnings.
During the December quarter, InterDigital was awarded five Horizon Europe flagship projects that focused on advancing 6G technology and infrastructure in Europe. EU’s Smart Networks and Services Joint Undertaking (SNS JU) is looking to utilize InterDigital’s rich heritage and expertise in wireless research and innovation to build the fundamentals and shape the 6G developments. These projects include a range of objectives like ensuring high predictability of the 6G network and enhancing reliability and time sensitivity by developing an AI-powered Digital Twin framework, matching the extreme bandwidth, latency and energy requirements for 6G, infrastructure development for evaluating 6G technologies, components etc. The deal is a proof of the company’s strong portfolio of wireless technology solutions and is likely to have cushioned top-line performance in the fourth quarter.
However, a highly-competitive market associated with ever-growing research and development expenditures is likely to have hurt the company’s earnings prospects in the fourth quarter. Also, rising tension between the United States and China and macroeconomic uncertainty may have affected the company’s revenues as well.
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $108 million, which indicates a decline of 3.6% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 79 cents, suggesting an improvement from the prior-year quarter’s reported figure of 70 cents.
Earnings Whispers
Our proven model predicts an earnings beat for InterDigital in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 17.20%, with the former pegged at $92 and the latter at 79 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
InterDigital, Inc. Price and EPS Surprise.
InterDigital, Inc. price-eps-surprise | InterDigital, Inc. Quote
Zacks Rank: InterDigital has a Zacks Rank #3.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Cambium Networks Corporation (CMBM - Free Report) is set to release quarterly numbers on Feb 16. It has an Earnings ESP of +2.46% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Universal Display Corporation (OLED - Free Report) is +1.06% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Feb 23.
The Earnings ESP for Splunk Inc. is +0.39% and it carries a Zacks Rank of 2 (Buy). The company is set to report quarterly numbers on Mar 1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.