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Applied Materials (AMAT) Q3 Earnings: Is Surprise in Store?
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Applied Materials, Inc. (AMAT - Free Report) is set to report fiscal third-quarter 2017 results on Aug 17. Last quarter, it posted a positive earnings surprise of 3.95%.
The company’s surprise history has been pretty impressive. It beat estimates in each of the last four quarters at an average of 3.35%.
Coming to share price movement, Applied Materials’ shares have returned 33.5% year to date, underperforming the industry’s gain of 34.3%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Applied Materials reported strong fiscal second-quarter results, with both the top and the bottom lines coming ahead of the Zacks Consensus Estimate.
Applied Materials has a solid product line and management has stepped up investments to prepare for the ongoing transition to larger wafer sizes and smaller process nodes. The ramp up in FinFET, 3D NAND and new display technology will likely be the catalysts.
Moreover, the company remains strongly positioned in China where it continues to see strong growth in semiconductor orders. Growing investments from Chinese domestic manufacturers will continue to be the main catalysts.
There is also scope for share gains on the Display side of the business. New display technologies like OLED are opening up new market opportunities for Applied Materials. The available market opportunity is now more than 10 times that of traditional LCD.
Developing trends in mobility, connectivity, video and wearable devices are fueling growth in the industry. This, in turn, is expediting advancement in mobile processors, solid-state storage and interactive displays.
The company has focused its structure and talent around key areas of value creation. It plans to align its product portfolio in a way that it generates the best returns for clients.
All these factors will likely lead the company to report decent results in the upcoming quarter. However, increasing competition, high fixed-cost structure and customer concentration remain major concerns.
Our proven model does not conclusively show that Applied Materials will beat on 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:Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 83 cents. Therefore, the Earnings ESP for the company is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:Applied Materials carries a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.
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 some stocks, which you may also want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Broadcom Limited (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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Applied Materials (AMAT) Q3 Earnings: Is Surprise in Store?
Applied Materials, Inc. (AMAT - Free Report) is set to report fiscal third-quarter 2017 results on Aug 17. Last quarter, it posted a positive earnings surprise of 3.95%.
The company’s surprise history has been pretty impressive. It beat estimates in each of the last four quarters at an average of 3.35%.
Coming to share price movement, Applied Materials’ shares have returned 33.5% year to date, underperforming the industry’s gain of 34.3%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Applied Materials reported strong fiscal second-quarter results, with both the top and the bottom lines coming ahead of the Zacks Consensus Estimate.
Applied Materials has a solid product line and management has stepped up investments to prepare for the ongoing transition to larger wafer sizes and smaller process nodes. The ramp up in FinFET, 3D NAND and new display technology will likely be the catalysts.
Moreover, the company remains strongly positioned in China where it continues to see strong growth in semiconductor orders. Growing investments from Chinese domestic manufacturers will continue to be the main catalysts.
There is also scope for share gains on the Display side of the business. New display technologies like OLED are opening up new market opportunities for Applied Materials. The available market opportunity is now more than 10 times that of traditional LCD.
Developing trends in mobility, connectivity, video and wearable devices are fueling growth in the industry. This, in turn, is expediting advancement in mobile processors, solid-state storage and interactive displays.
The company has focused its structure and talent around key areas of value creation. It plans to align its product portfolio in a way that it generates the best returns for clients.
All these factors will likely lead the company to report decent results in the upcoming quarter. However, increasing competition, high fixed-cost structure and customer concentration remain major concerns.
Applied Materials, Inc. Price and EPS Surprise
Applied Materials, Inc. Price and EPS Surprise | Applied Materials, Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that Applied Materials will beat on 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:Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 83 cents. Therefore, the Earnings ESP for the company is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank:Applied Materials carries a Zacks Rank #3 which when combined with a 0.00% ESP makes surprise prediction difficult.
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 some stocks, which you may also want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Advanced Micro Devices (AMD - Free Report) with an Earnings ESP of +20.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadcom Limited (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.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>