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Xilinx (XLNX) to Post Q1 Earnings: What's in the Cards?

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Xilinx Inc. (XLNX - Free Report) is slated to report first-quarter 2018 results on Jul 26. Last quarter, the company posted a positive earnings surprise of 5.56%. Notably, Xilinx outperformed the Zacks Consensus Estimate in all the preceding four quarters with an average positive earnings surprise of 8.89%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Keeping its earnings streak alive for the 12th successive quarter, Xilinx reported better-than-expected fourth-quarter results, surpassing the Zacks Consensus Estimate on both counts. Further, both the top line and bottom line increased year over year.

Rising demand for 28-nm, 20-nm and 16-nm nodes, driven by higher wireless deployments and strength in the wired communication segment, are expected to remain growth drivers. The company’s product launches are likely to further aid revenues.

We are also encouraged by Xilinx’s endeavor to return shareholder value through continued share buybacks and dividends. These investor-friendly initiatives not only boost earnings but also increase investors’ confidence and loyalty.

However, a slowdown in the Chinese economy, along with economic weakness in Europe and the Asia-Pacific region, could adversely affect Xilinx’s near-term results. Competition from the likes of Lattice Semiconductor Corporation (LSCC - Free Report) is another headwind.

Xilinx, Inc. Price and EPS Surprise


Earnings Whispers

Our proven model does not conclusively show that Xilinxis 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. But that is not the case here, as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 60 cents per share. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DST Systemscarries a Zacks Rank #2. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:

Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , with an Earnings ESP of +33.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allegiant Travel Company (ALGT - Free Report) , with an Earnings ESP of +0.34% and a Zacks Rank #2.

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