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QuickLogic (QUIK) to Post Q4 Earnings: What's in the Cards?

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Semiconductor solutions provider, QuickLogic Corporation (QUIK - Free Report) is scheduled to report fourth-quarter 2016 earnings results after the closing bell on Feb 15. Last quarter, the company reported loss of 7 cents, which narrowed down from a loss of 9 cents reported in the year-ago quarter but was in line with the Zacks Consensus Estimate.

Let's see how things are shaping up for this announcement.

Key Factors to Consider

QuickLogic posted preliminary fourth-quarter results in mid-January. Total revenue was anticipated to be $2.9 million, mid-point of the guidance range provided on Nov 2. New product revenues were anticipated to be $1.6 million, slightly better than management’s earlier expectation of $1.5 million. QickLogic ended the fourth quarter with a higher-than-anticipated cash balance of approximately $14.9 million.

We note that following the preliminary announcement QuikLogic shares have outperformed the Zacks Electronics- Semiconductors industry. While the stock has gained 28.6%, the industry returned 10.6% in the last one month.

Further, on a non-GAAP basis, the company had forecast gross margin to be approximately 32% (+/- 3). Operating expense was anticipated to decline from $5.5 million to $4.8 million (+/- $300 thousand) backed by cost savings. The company’s loss was pegged at 6 cents per share for the to-be-reported quarter.

Moreover, we believe that the partnership with CyweeMotion is positive for the company as it not only broadens product portfolio but also expanded its footprint in China.

Earnings Whispers

However, our proven model does not conclusively show that QuickLogic is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: QuickLogic’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 7 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: QuickLogic has a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Applied Optoelectronics (AAOI - Free Report) has an Earnings ESP of +15.87% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NII Holdings has an Earnings ESP of +43.48% and a Zacks Rank #2.

GoDaddy (GDDY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3.

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