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Key Predictions for Earnings Reports of QCOM, QRVO
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We are halfway through the third-quarter 2017 earnings season, with 54% of the S&P 500 members having reported their results. However, the earnings calendar is not the same for all companies. Qualcomm Inc (QCOM - Free Report) will report fourth-quarter fiscal 2017 numbers on Nov 1, after the market closes. Qorvo Inc (QRVO - Free Report) is set to release second-quarter fiscal 2018 on the same day.
As per Zacks categorization, Qualcomm and Qorvo are grouped under the broader Computer and Technology sector (one of the 16 Zacks sectors).
Let’s take a look at the Technology sector, before we can discuss the financial and operating metrics of these companies.
Technology Sector Scorecard
We have results from 54.4% of the Technology sector’s market cap in the S&P 500 index. Total earnings for these companies are up 22% from the same period last year on 8% higher revenues, with 79.3% beating EPS estimates and 86.2% surpassing revenue estimates.
Considering the Q3 earnings and revenue expectations for the sector as a whole along with the reported results, Tech sector earnings are expected to be up 16% from the same period last year on 7.6% higher revenues.
Moreover, this week await the quarterly results from tech giants like Apple Inc (AAPL - Free Report) and Facebook Inc . Apple will report fourth-quarter fiscal 2017 results on Nov 2, after the marker closes. Facebook is slated to release third-quarter 2017 results on Nov 1, after the bell.
Tech Stocks Poised to Release Earnings on Nov 1
Our quantitative model offers some insight into stocks that are about to report their earnings. Per the model, a stock needs to have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, to deliver earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Qualcomm is one of the largest manufacturer of wireless chipset based on baseband technology in the United States. The company continues to retain its leadership in 5G, chipset market and mobile connectivity through its updated Snapdragon processors and applications.
Per the Zacks Consesnsus Estimate, the company’s prospects in the to-be-reported quarter based on certain non-financial metrics look impressive., Total number of chipset-enabled devices to be sold in fourth-quarter 2017 is around 56 million. Qualcomm is estimated to ship approximately 216 million CDMA-based MSM (Mobile Station Modem) chipsets in the quarter under review as against 187 million reported in the previous quarter.
Despite such positives, the chances of this company beating the Zacks Consensus Estimate in the quarter under review is low. This is because Qualcomm has an Earnings ESP of 0.00% (the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 81 cents). (Read more: Can Qualcomm Pull Off a Surprise in Q4 Earnings?)
Also, Qualcomm displays a mixed earnings surprise history. In the last four quarters, the company’s earnings were in line with the Zacks Consensus Estimate in two, while surpassing the same in the remaining two quarters, with an average beat of 6.49%.
Qorvo is a provider of technologies and RF solutions for mobile, infrastructure and aerospace/defence applications.
The company has a positive earnings surprise history, beating the Zacks Consensus Estimates in three of the trailing four quarters, with an average beat of 2.64%.
For the second quarter of fiscal 2018, Qorvo forecasts strong sequential revenue growth primarily on the strength of mobile content gains on marquee platforms, modest improvements in the Chinese market and continued strength in Infrastructure and Defense (IDP) segment. Management expects non-GAAP revenues to be approximately $800-$820 million. Earnings are anticipated between $1.36 and $1.50 per share.
We believe improving demand in China and IDP will act as key catalysts for Qorvo in the soon-to-be-reported quarter.
Notably, China accounts for almost 30% of Qorvo’s Mobile Product revenues. Per market research firm GFK, smartphone demand in China increased 5% in third-quarter 2017, while average selling price increased 15% year over year. The Zacks Consensus Estimate for Mobile Products is currently pegged at $616 million.
Qorvo is benefiting from strong demand for its high-powered Bulk Acoustic Wave (BAW) for the 3.5 gigahertz band for 5G massive Multiple Input Multiple Output (MIMO) antennas. The Zacks Consensus Estimate for IDP is currently pegged at $189 million as against $184 million as reported by the company in its previous quarter.
Despite such positive outlook for the company’s growth prospects in terms of increasing revenues, the company’s unfavorable Zacks Rank #4 (Sell) and -0.35% Earnings ESP dims the possibility of an earnings beat in the to-be-reported quarter. (Read more: Qorvo's Q2 Earnings to Benefit From Robust IDP Growth)
Meanwhile, we also 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.
Irrespective of an earnings beat or miss, investors should focus on companies’ fundamentals to make investment decisions. Therefore, don’t forget to check our full write up on earnings releases of these stocks later.
An Overview of Q3 Earnings
We now have results from 272 S&P 500 members, accounting for 64.2% of the index’s total market capitalization (based on our latest Earnings Preview). Total earnings for these companies are up 8.7% from the same period last year on 6.7% higher revenues, with 75.7% beating EPS estimates and 66.2% beating revenue estimates.
With 228 companies yet to release their quarterly numbers, total third-quarter earnings are expected to be inch up 5.4% from the year-ago period on 5.5% higher revenues.
Around 900 companies are scheduled to release results this week, including 134 S&P 500 members. By the end of this week, we will have quarterly results from more than 80% of the S&P 500 members. Unlike the large-cap stocks in the S&P 500 index, we are at an early stage in the small-cap reporting cycle. As of Oct 27, we have seen results from almost 31% of the small-cap S&P 600 members, with the reporting tally crossing the halfway mark by the end of this week.
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Image: Bigstock
Key Predictions for Earnings Reports of QCOM, QRVO
We are halfway through the third-quarter 2017 earnings season, with 54% of the S&P 500 members having reported their results. However, the earnings calendar is not the same for all companies. Qualcomm Inc (QCOM - Free Report) will report fourth-quarter fiscal 2017 numbers on Nov 1, after the market closes. Qorvo Inc (QRVO - Free Report) is set to release second-quarter fiscal 2018 on the same day.
As per Zacks categorization, Qualcomm and Qorvo are grouped under the broader Computer and Technology sector (one of the 16 Zacks sectors).
Let’s take a look at the Technology sector, before we can discuss the financial and operating metrics of these companies.
Technology Sector Scorecard
We have results from 54.4% of the Technology sector’s market cap in the S&P 500 index. Total earnings for these companies are up 22% from the same period last year on 8% higher revenues, with 79.3% beating EPS estimates and 86.2% surpassing revenue estimates.
Considering the Q3 earnings and revenue expectations for the sector as a whole along with the reported results, Tech sector earnings are expected to be up 16% from the same period last year on 7.6% higher revenues.
Moreover, this week await the quarterly results from tech giants like Apple Inc (AAPL - Free Report) and Facebook Inc . Apple will report fourth-quarter fiscal 2017 results on Nov 2, after the marker closes. Facebook is slated to release third-quarter 2017 results on Nov 1, after the bell.
Tech Stocks Poised to Release Earnings on Nov 1
Our quantitative model offers some insight into stocks that are about to report their earnings. Per the model, a stock needs to have the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, to deliver earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Qualcomm is one of the largest manufacturer of wireless chipset based on baseband technology in the United States. The company continues to retain its leadership in 5G, chipset market and mobile connectivity through its updated Snapdragon processors and applications.
Per the Zacks Consesnsus Estimate, the company’s prospects in the to-be-reported quarter based on certain non-financial metrics look impressive., Total number of chipset-enabled devices to be sold in fourth-quarter 2017 is around 56 million. Qualcomm is estimated to ship approximately 216 million CDMA-based MSM (Mobile Station Modem) chipsets in the quarter under review as against 187 million reported in the previous quarter.
Moreover, Qualcomm currently carries a favorable Zacks Rank #3 which increases the predictive power of ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Despite such positives, the chances of this company beating the Zacks Consensus Estimate in the quarter under review is low. This is because Qualcomm has an Earnings ESP of 0.00% (the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 81 cents). (Read more: Can Qualcomm Pull Off a Surprise in Q4 Earnings?)
Also, Qualcomm displays a mixed earnings surprise history. In the last four quarters, the company’s earnings were in line with the Zacks Consensus Estimate in two, while surpassing the same in the remaining two quarters, with an average beat of 6.49%.
QUALCOMM Incorporated Price and EPS Surprise
QUALCOMM Incorporated Price and EPS Surprise | QUALCOMM Incorporated Quote
Qorvo is a provider of technologies and RF solutions for mobile, infrastructure and aerospace/defence applications.
The company has a positive earnings surprise history, beating the Zacks Consensus Estimates in three of the trailing four quarters, with an average beat of 2.64%.
For the second quarter of fiscal 2018, Qorvo forecasts strong sequential revenue growth primarily on the strength of mobile content gains on marquee platforms, modest improvements in the Chinese market and continued strength in Infrastructure and Defense (IDP) segment. Management expects non-GAAP revenues to be approximately $800-$820 million. Earnings are anticipated between $1.36 and $1.50 per share.
We believe improving demand in China and IDP will act as key catalysts for Qorvo in the soon-to-be-reported quarter.
Notably, China accounts for almost 30% of Qorvo’s Mobile Product revenues. Per market research firm GFK, smartphone demand in China increased 5% in third-quarter 2017, while average selling price increased 15% year over year. The Zacks Consensus Estimate for Mobile Products is currently pegged at $616 million.
Qorvo is benefiting from strong demand for its high-powered Bulk Acoustic Wave (BAW) for the 3.5 gigahertz band for 5G massive Multiple Input Multiple Output (MIMO) antennas. The Zacks Consensus Estimate for IDP is currently pegged at $189 million as against $184 million as reported by the company in its previous quarter.
Despite such positive outlook for the company’s growth prospects in terms of increasing revenues, the company’s unfavorable Zacks Rank #4 (Sell) and -0.35% Earnings ESP dims the possibility of an earnings beat in the to-be-reported quarter. (Read more: Qorvo's Q2 Earnings to Benefit From Robust IDP Growth)
Meanwhile, we also 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.
Qorvo, Inc. Price and EPS Surprise
Qorvo, Inc. Price and EPS Surprise | Qorvo, Inc. Quote
Irrespective of an earnings beat or miss, investors should focus on companies’ fundamentals to make investment decisions. Therefore, don’t forget to check our full write up on earnings releases of these stocks later.
An Overview of Q3 Earnings
We now have results from 272 S&P 500 members, accounting for 64.2% of the index’s total market capitalization (based on our latest Earnings Preview). Total earnings for these companies are up 8.7% from the same period last year on 6.7% higher revenues, with 75.7% beating EPS estimates and 66.2% beating revenue estimates.
With 228 companies yet to release their quarterly numbers, total third-quarter earnings are expected to be inch up 5.4% from the year-ago period on 5.5% higher revenues.
Around 900 companies are scheduled to release results this week, including 134 S&P 500 members. By the end of this week, we will have quarterly results from more than 80% of the S&P 500 members. Unlike the large-cap stocks in the S&P 500 index, we are at an early stage in the small-cap reporting cycle. As of Oct 27, we have seen results from almost 31% of the small-cap S&P 600 members, with the reporting tally crossing the halfway mark by the end of this week.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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