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Diodes (DIOD) to Report Q3 Earnings: What's in the Offing?

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Diodes Incorporated (DIOD - Free Report) is slated to report third-quarter 2018 results on Nov 6, after the closing bell.

The company delivered an impressive average positive earnings surprise of 6.58% over the trailing four quarters. Notably, Diodes’ second-quarter 2018 earnings of 58 cents per share outpaced the Zacks Consensus Estimate of 57 cents.

Revenues were $304 million, up 15.2% from the year-ago quarter. Further, the figure surpassed the Zacks Consensus Estimate of $300 million.

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

Factors at Play

Diodes is a leading manufacturer and supplier of high-quality discrete and analog semiconductor products, primarily to the communications, computing, industrial, consumer electronics and automotive markets.

The company benefitted from robust growth in automotive and industrial end markets, which is likely to be a tailwind, going forward. The company has recently gained robust momentum in CMOS LDO, Aris, power protection, sensor, and signal integrity, on the back of new design wins.

The company also unveiled new product particularly designed for communication of brushless motor, slow meters, linear and coders, and position sensors in the industrial application. We believe the company’s new product launches will boost overall results in the to-be-reported quarter.

Diodes’ acquired businesses — BCD Semiconductor and Anachip Corporation — will further help it further in expanding presence in the broader analog market and extend its product offerings.

However, competition from the likes of Fairchild Semiconductor International Inc. and Vishay Intertechnology Inc. (VSH - Free Report) remains a concern for the company.

Diodes Incorporated Price and EPS Surprise

 

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

That is not the case here as we will see below.

Earnings ESP: Diodes has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate as well as the Most Accurate Estimate for the company’s third-quarter 2018 earnings is pegged at 63 cents.

Zacks Rank: Diodes has a Zacks Rank #3, when combined with an Earnings ESP of 0.00%, makes surprise prediction inconclusive.

It should be noted that 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 to Consider

Here are a couple of stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Match Group, Inc. (MTCH - Free Report) has a Zacks Rank #2 and an Earnings ESP of +3.59%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Adobe Systems Incorporated (ADBE - Free Report) has a Zacks Rank #2 and an Earnings ESP of +0.19%.

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