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What's in Store for QuickLogic (QUIK) this Earnings Season?

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QuickLogic (QUIK - Free Report) is set to report second-quarter 2017 results on Aug 9.

Last quarter, the company reported a loss of 5 cents per share, which was in line with the Zacks Consensus Estimate. Revenues increased 6.7% year over year to $3.2 million and was above the Zacks Consensus Estimate of $3.1 million.

For the second quarter, QuickLogic expects to generate revenues of $3.2 million (+/-10%). Of the total revenue, approximately $1.8 million is expected to come from new products while $1.4 million will be realized in mature product revenues.

Non-GAAP gross margin is forecast to be approximately 44% (+/-3%). At the mid-point of the company’s guidance, non-GAAP loss is expected to be approximately $3.3 million or 4 cents per share.

Notably, QuickLogic’s shares have lost 2.9% of its value year to date against 25.2% growth of its industry.

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

Factors at Play

QuickLogic’s growing traction in sensor processing solutions and embedded FPGA (eFPGA) Intellectual Property (IP) Licensing is a positive for the company. Further, management expects gross margin to benefit from a favorable customer and product mix as well as improvement in IP licensing revenue recognition.

The company’s continuous initiatives to innovate and expand product portfolio is expected to improve its competitive position. In May 2017, the company enhanced its EOS S3 Sensor Processing Platform by adding a new barge-in feature enabled by Acoustic Echo Cancellation (AEC) technology. We believe this will mark an increase in its user base in the to-be-reported quarter, thereby boosting the top line.

Moreover, QuickLogic’s initiatives to expand globally are also a positive as it enables the company to address the growing demand from the emerging markets.  Establishment of eFPGA support center in Taiwan and Wholly Foreign Owned Enterprise (WFOE) in Shanghai reflects its growing clout in the Asian markets.

QuickLogic Corporation Price and EPS Surprise


QuickLogic Corporation Price and EPS Surprise | QuickLogic Corporation Quote

Earnings Whispers

Our proven model does not conclusively show that QuickLogic is likely to deliver a positive surprise 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. This 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 stand at a loss of 5 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: QuickLogic’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

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

Stocks That Warrant a Look

Here are a few companies that you may want to consider as our model shows that these have the right combination of elements to deliver an earnings beat in their upcoming release:

Luxoft Holding (LXFT - Free Report) with an Earnings ESP of +5.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.                        

Broadcom (AVGO - Free Report) with an Earnings ESP of +2.57% and a Zacks Rank #2.

CACI International (CACI - Free Report) with an Earnings ESP of +1.83% and a Zacks Rank #2.

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