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Ultra Clean (UCTT) to Report Q1 Earnings: What's in Store?

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Ultra Clean Holdings, Inc. (UCTT - Free Report) is scheduled to report first-quarter 2020 results on Apr 29.

For the quarter, the company expects revenues in the range of $290 million to $320 million

The Zacks Consensus Estimate for revenues is pegged at $305 million, indicating growth of 17.2% from the figure reported in the year-ago quarter.

The consensus mark for first-quarter earnings has declined 6.8% over the past 30 days to 41 cents per share. However, the figure indicates growth of 95.2% from the figure reported in the year-ago quarter.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, with positive earnings surprise of 35.37% on average.

Ultra Clean Holdings, Inc. Price and EPS Surprise

Ultra Clean Holdings, Inc. Price and EPS Surprise

Ultra Clean Holdings, Inc. price-eps-surprise | Ultra Clean Holdings, Inc. Quote

Let’s see how things have shaped up for this announcement.

Factors to Consider

Ultra Clean Holdings first-quarter results are expected to reflect improvement in fab utilization, which is likely to have bolstered growth in the services division.

As WFE investment rises, the company’s cleaning and analytical services are likely to have become more critical to its integrated device manufacturer (IDM) and original equipment manufacturer (OEM) customers to support the production of leading next-gen devices.

The company’s strong portfolio of offerings has well positioned it to capitalize on the growing demand for technology that supports 5G wireless, high-performance cloud computing, IoT and AI.

Continued strength in foundry and logic spending is expected to have driven top-line growth.

Moreover, its OEM customers are likely to have shifted more toward outsourcing rather than in-house, which is likely to have aided its DRAM business. 

However, Ultra Clean’s investments in expanding capacity in the form of additional hiring are likely to have kept margins under pressure.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Ultra Clean Holdings has an Earnings ESP of +2.44% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

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

Pixelworks (PXLW - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shopify Inc. (SHOP - Free Report) has an Earnings ESP of +5.85% and a Zacks Rank #2.

Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.

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