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Will Top-Line Decline Hurt InterDigital (IDCC) Q4 Earnings?
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InterDigital, Inc. (IDCC - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 15, before the opening bell. IDCC pulled off a trailing four-quarter earnings surprise of 170.71%, on average. Despite its global reach and diversified tech-based product portfolio, the company is likely to have witnessed top-line contraction due to competitive market and macroeconomic headwinds.
Factors at Play
During the quarter, InterDigital announced that it has extended its partnership with the University Carlos III of Madrid (UC3M) in Spain. Over the years, the collaboration has contributed valuable research inputs within the wireless ecosystem. The latest agreement will further reinforce this long-standing partnership and accelerate research in advanced integrated sensing and communications in next-generation cellular systems, 5G Advanced and 6G. This is likely to be reflected in the upcoming quarterly results.
In the fourth quarter, InterDigital inked a strategic partnership with the Indian Institute of Technology, Kanpur, to expedite research for advanced 5G and 6G networks. The strong research foundations of the two entities are expected to accelerate critical advancements in MIMO systems. Integration of Advanced MIMO will extend network coverage area and facilitate ultra-low latency communications, supporting applications such as augmented reality and autonomous vehicles.
In addition, 6G powered by Advanced MIMO will offer the extensibility needed to support high bandwidth-intensive applications like metaverse experiences and holographic communications. This is likely to have generated incremental revenues during the quarter.
However, stiff competition is forcing InterDigital to invest significantly in technological innovation and R&D to get an edge over other players in the competitive wireless equipment industry. This is putting pressure on the company’s margins. The rising debt burden has also been affecting 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.
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $104 million, indicating a decrease from $117 million reported in the prior-year quarter. The consensus estimate for adjusted earnings per share stands at $1.21, suggesting an improvement from the prior-year quarter’s reported figure of $1.08.
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 carries a Zacks Rank #2.
Key Picks
CommScope (COMM - Free Report) is scheduled to report quarterly numbers on Feb 29. It has an Earnings ESP of +9.09% and a Zacks Rank of 3.
The Earnings ESP for NVIDIA Corporation (NVDA - Free Report) is +5.26% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 21.
The Earnings ESP for Cogent (CCOI - Free Report) is +3.86% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 29.
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Will Top-Line Decline Hurt InterDigital (IDCC) Q4 Earnings?
InterDigital, Inc. (IDCC - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 15, before the opening bell. IDCC pulled off a trailing four-quarter earnings surprise of 170.71%, on average. Despite its global reach and diversified tech-based product portfolio, the company is likely to have witnessed top-line contraction due to competitive market and macroeconomic headwinds.
Factors at Play
During the quarter, InterDigital announced that it has extended its partnership with the University Carlos III of Madrid (UC3M) in Spain. Over the years, the collaboration has contributed valuable research inputs within the wireless ecosystem. The latest agreement will further reinforce this long-standing partnership and accelerate research in advanced integrated sensing and communications in next-generation cellular systems, 5G Advanced and 6G. This is likely to be reflected in the upcoming quarterly results.
In the fourth quarter, InterDigital inked a strategic partnership with the Indian Institute of Technology, Kanpur, to expedite research for advanced 5G and 6G networks. The strong research foundations of the two entities are expected to accelerate critical advancements in MIMO systems. Integration of Advanced MIMO will extend network coverage area and facilitate ultra-low latency communications, supporting applications such as augmented reality and autonomous vehicles.
In addition, 6G powered by Advanced MIMO will offer the extensibility needed to support high bandwidth-intensive applications like metaverse experiences and holographic communications. This is likely to have generated incremental revenues during the quarter.
However, stiff competition is forcing InterDigital to invest significantly in technological innovation and R&D to get an edge over other players in the competitive wireless equipment industry. This is putting pressure on the company’s margins. The rising debt burden has also been affecting 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.
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $104 million, indicating a decrease from $117 million reported in the prior-year quarter. The consensus estimate for adjusted earnings per share stands at $1.21, suggesting an improvement from the prior-year quarter’s reported figure of $1.08.
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 carries a Zacks Rank #2.
Key Picks
CommScope (COMM - Free Report) is scheduled to report quarterly numbers on Feb 29. It has an Earnings ESP of +9.09% and a Zacks Rank of 3.
The Earnings ESP for NVIDIA Corporation (NVDA - Free Report) is +5.26% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 21.
The Earnings ESP for Cogent (CCOI - Free Report) is +3.86% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 29.