We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Top-Line Contraction Hurt InterDigital (IDCC) Q2 Earnings?
Read MoreHide Full Article
InterDigital, Inc. (IDCC - Free Report) is scheduled to report second-quarter 2023 results on Aug 3, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 579.03%. IDCC pulled off a trailing four-quarter earnings surprise of 170.89%, on average.
Despite being awarded several research programs and continued focus on innovation initiatives, stiff competition, macroeconomic headwinds and geopolitical volatility are expected to impede the company’s top line during the second quarter.
Factors at Play
During the second quarter, InterDigital announced that it has joined forces with the University of Surrey to boost the development of 6G technology. The long-term research partnership was made official during the 6GSymposium held at the University of Surrey.
InterDigital has made immense contributions to the Horizon Europe 5G public-private partnership program. The company has also received funding for eight U.K. and EU-led 6G research programs to accelerate innovation and define the roadmap for 6G development. These developments are likely to have had a favorable impact on second-quarter performance.
In the quarter-under-review, InterDigital inked a new patent license agreement with Alps Alpine Co., Ltd. The deal covers Alps Alpine’s range of devices under InterDigital’s standard essential patents related to the High Efficiency Video Coding portfolio.
However, InterDigital faces stiff rivalry and has to commit substantial resources to research and development to accelerate innovation and maintain its competitive edge. This is affecting the company’s margin. The rising debt burden has also been limiting its growth potential. Macroeconomic uncertainty and geopolitical volatility remain a headwind. These factors are likely to have had a negative impact on the top line.
Our estimate for total recurring revenues is pegged at $78.2 million, suggesting a 21.9% year-over-year decline. Our estimate for total catch-up revenues is pegged at $22.2 million, indicating a decline from the $24.6 million reported in the year-ago quarter.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $101 million, which suggests a decline from the year-ago quarter’s figure of $125 million. The consensus estimate for adjusted earnings per share is pegged at $1.21, suggesting an improvement from 69 cents reported in the prior-year quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for InterDigital this time around. 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. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: InterDigital currently sports a Zacks Rank #1.
Stocks to Consider
Here are some 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:
Tetra Tech (TTEK - Free Report) has an Earnings ESP of +20.00% and carries a Zacks Rank of 3. The company is set to report its quarterly numbers on Aug 9.
Super Micro Computer, Inc. (SMCI - Free Report) has an Earnings ESP of +15.84% and sports a Zacks Rank of 1. The company is set to report its quarterly numbers on Aug 8.
Image: Bigstock
Will Top-Line Contraction Hurt InterDigital (IDCC) Q2 Earnings?
InterDigital, Inc. (IDCC - Free Report) is scheduled to report second-quarter 2023 results on Aug 3, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 579.03%. IDCC pulled off a trailing four-quarter earnings surprise of 170.89%, on average.
Despite being awarded several research programs and continued focus on innovation initiatives, stiff competition, macroeconomic headwinds and geopolitical volatility are expected to impede the company’s top line during the second quarter.
Factors at Play
During the second quarter, InterDigital announced that it has joined forces with the University of Surrey to boost the development of 6G technology. The long-term research partnership was made official during the 6GSymposium held at the University of Surrey.
InterDigital has made immense contributions to the Horizon Europe 5G public-private partnership program. The company has also received funding for eight U.K. and EU-led 6G research programs to accelerate innovation and define the roadmap for 6G development. These developments are likely to have had a favorable impact on second-quarter performance.
In the quarter-under-review, InterDigital inked a new patent license agreement with Alps Alpine Co., Ltd. The deal covers Alps Alpine’s range of devices under InterDigital’s standard essential patents related to the High Efficiency Video Coding portfolio.
However, InterDigital faces stiff rivalry and has to commit substantial resources to research and development to accelerate innovation and maintain its competitive edge. This is affecting the company’s margin. The rising debt burden has also been limiting its growth potential. Macroeconomic uncertainty and geopolitical volatility remain a headwind. These factors are likely to have had a negative impact on the top line.
Our estimate for total recurring revenues is pegged at $78.2 million, suggesting a 21.9% year-over-year decline. Our estimate for total catch-up revenues is pegged at $22.2 million, indicating a decline from the $24.6 million reported in the year-ago quarter.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $101 million, which suggests a decline from the year-ago quarter’s figure of $125 million. The consensus estimate for adjusted earnings per share is pegged at $1.21, suggesting an improvement from 69 cents reported in the prior-year quarter.
Earnings Whispers
Our proven model does not predict an earnings beat for InterDigital this time around. 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. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.21. 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 currently sports a Zacks Rank #1.
Stocks to Consider
Here are some 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:
Motorola Solutions, Inc. (MSI - Free Report) is set to release its quarterly numbers on Aug 3. It has an Earnings ESP of +0.07% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tetra Tech (TTEK - Free Report) has an Earnings ESP of +20.00% and carries a Zacks Rank of 3. The company is set to report its quarterly numbers on Aug 9.
Super Micro Computer, Inc. (SMCI - Free Report) has an Earnings ESP of +15.84% and sports a Zacks Rank of 1. The company is set to report its quarterly numbers on Aug 8.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.