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Semiconductor Stocks' Earnings on Jul 25: AMD, XLNX & More
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The Q2 earnings cycle is in full swing with a number of semiconductor companies slated to report quarterly numbers over the next few days. The industry serves as a driver, enabler and indicator of technological progress.
According to the latest Earnings Preview, technology is one of the six sectors predicted to report double-digit earnings growth this quarter. Per the report, total earnings for the tech sector are projected to be up 24.5% on 11.4% higher revenues.
We note that the technology sector has been a robust performer over the past year. The sector has been benefiting from increasing demand for cloud-based platforms, growing adoption of Artificial Intelligence (AI) solutions, Augmented/Virtual reality devices, autonomous cars, advanced driver assisted systems (ADAS) and Internet of Things (IoT) related software.
We believe the aforementioned trends have provided some much-needed opportunity to semiconductor companies, which still consumes the bulk of the chips. Notably, according to the latest report of World Semiconductor Trade Statistics (“WSTS”), semiconductor revenues climbed 20.6% year over year to $408.7 billion in 2017.
The semiconductor industry is anticipated to continue to witness growth this year as well, although not as high as 2017 but still at a respectable rate. Per the WSTS report, semiconductor revenues are likely to touch $463 billion in 2018, representing growth of 12.4%.
The industry is poised to gain from rising demand for new technologies, deployment of 5G broadband technology globally and President Trump’s pro-business policies, including tax cuts, deregulation and outlays on infrastructure.
However, this does not ensure earnings beat for all companies in the space. It should be noted that a company’s earnings outperformance is dependent on the overall business environment as well as management’s ability to implement operating and strategic plans.
In other words, a company may perform dismally despite a favorable business environment if it fails to capitalize on the opportunities due to lack of execution.
Let’s see what’s in store for the following semiconductor stocks, all of which are slated to release quarterly figures tomorrow.
Advanced Micro Devices, Inc. (AMD - Free Report) is scheduled to report second-quarter 2018 results. The Zacks Consensus Estimate for earnings is pegged at 12 cents per share while the same for revenues is at $1.72 million. The estimates, when compared with the year-ago quarter figures, represent 500% and 40.6% increase in earnings and revenues, respectively. The stock carries a Zacks Rank #2 (Buy).
The chipmaker exhibited its new 7nm AMD Radeon Vega GPU products. AMD also showcased second generation Threadripper CPU powered by Ryzen technology. 12nm Zen+ architecture will support the Ryzen second generation based Threadripper 2.
All of these new releases should aid AMD compete against the likes of Intel and NVIDIA. Robust performance of the company’s GPU products recorded under its Computing and Graphics segment are expected to drive results. Increasing adoption of artificial intelligence (AI) techniques and machine learning tools in industries like gaming, automotive and blockchain are primarily responsible for driving GPU demand. (Read More: Factors Likely to Impact Advanced Micro's Q2 Earnings)
Next up is Xilinx , which is set to report first-quarter 2019 results. The stock carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter under review is pegged at 73 cents, representing significant year-over-year growth of 15.9%. Additionally, analysts polled by Zacks project revenues of roughly $672.2 million, up 9.2% from the year-ago quarter.
The company’s ongoing transition from a field programmable gate arrays (FPGA) provider to an all-programmable devices producer has been helping the company gain market share and counter stiff competition from the likes of Intel.
Xilinx is also riding high on its Data Center business, which it recognizes as the fasting growing one. The company’s focus on the business is further evident from the newly formed Data Center and TME (Testing, Measurement, and Emulation) segment, its new business segment starting this quarter. (Read More: Xilinx to Report Q1 Earnings: What's in the Cards?)
Another semiconductor company, Monolithic Power Systems Inc. (MPWR - Free Report) , is scheduled to report second-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $139.6 million and 90 cents per share, indicating growth of 24.4% and 32.4%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3.
Notably, the company has surpassed the Zacks Consensus Estimate in the trailing four quarters, recording an average positive surprise of 1.94%.
The increasing demand for analog Integrated Circuit (“IC”) and sensors, and deep-rooted partnerships with leading auto suppliers remains a tailwind. Monolithic Power expects its Served Addressed Market (“SAM”) for the automotive industry to expand significantly, bolstering revenues.
We anticipate the company to benefit from the ongoing Grantley to Purley platform conversion in the server market as well as from increased demand for servers due to the ongoing adoption of cloud computing. (Read More: Monolithic Power (MPWR - Free Report) Q2 Earnings: What's in the Cards?)
Monolithic Power Systems, Inc. Price and Consensus
Silicon Laboratories Inc. (SLAB - Free Report) , a global fabless semiconductor company involved in designing, developing and marketing mixed-signal analog intensive integrated circuits (ICs), will report second-quarter 2018 results. Analysts covering the stock believe the company will benefit from increasing demand for its IoT products across the automotive, industrial and consumer end markets. Nevertheless, stiff competition from NXP Semiconductors and Texas Instruments is a major headwind.
The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $214.5 million and 84 cents per share, respectively, indicating growth of 12.8% and 6.3%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3.
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Semiconductor Stocks' Earnings on Jul 25: AMD, XLNX & More
The Q2 earnings cycle is in full swing with a number of semiconductor companies slated to report quarterly numbers over the next few days. The industry serves as a driver, enabler and indicator of technological progress.
According to the latest Earnings Preview, technology is one of the six sectors predicted to report double-digit earnings growth this quarter. Per the report, total earnings for the tech sector are projected to be up 24.5% on 11.4% higher revenues.
We note that the technology sector has been a robust performer over the past year. The sector has been benefiting from increasing demand for cloud-based platforms, growing adoption of Artificial Intelligence (AI) solutions, Augmented/Virtual reality devices, autonomous cars, advanced driver assisted systems (ADAS) and Internet of Things (IoT) related software.
We believe the aforementioned trends have provided some much-needed opportunity to semiconductor companies, which still consumes the bulk of the chips. Notably, according to the latest report of World Semiconductor Trade Statistics (“WSTS”), semiconductor revenues climbed 20.6% year over year to $408.7 billion in 2017.
The semiconductor industry is anticipated to continue to witness growth this year as well, although not as high as 2017 but still at a respectable rate. Per the WSTS report, semiconductor revenues are likely to touch $463 billion in 2018, representing growth of 12.4%.
The industry is poised to gain from rising demand for new technologies, deployment of 5G broadband technology globally and President Trump’s pro-business policies, including tax cuts, deregulation and outlays on infrastructure.
However, this does not ensure earnings beat for all companies in the space. It should be noted that a company’s earnings outperformance is dependent on the overall business environment as well as management’s ability to implement operating and strategic plans.
In other words, a company may perform dismally despite a favorable business environment if it fails to capitalize on the opportunities due to lack of execution.
Let’s see what’s in store for the following semiconductor stocks, all of which are slated to release quarterly figures tomorrow.
Advanced Micro Devices, Inc. (AMD - Free Report) is scheduled to report second-quarter 2018 results. The Zacks Consensus Estimate for earnings is pegged at 12 cents per share while the same for revenues is at $1.72 million. The estimates, when compared with the year-ago quarter figures, represent 500% and 40.6% increase in earnings and revenues, respectively. The stock carries a Zacks Rank #2 (Buy).
Further, the company has beaten the Zacks Consensus Estimate in three the trailing four quarters with an average positive surprise of 35.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chipmaker exhibited its new 7nm AMD Radeon Vega GPU products. AMD also showcased second generation Threadripper CPU powered by Ryzen technology. 12nm Zen+ architecture will support the Ryzen second generation based Threadripper 2.
All of these new releases should aid AMD compete against the likes of Intel and NVIDIA. Robust performance of the company’s GPU products recorded under its Computing and Graphics segment are expected to drive results. Increasing adoption of artificial intelligence (AI) techniques and machine learning tools in industries like gaming, automotive and blockchain are primarily responsible for driving GPU demand. (Read More: Factors Likely to Impact Advanced Micro's Q2 Earnings)
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. Price and Consensus | Advanced Micro Devices, Inc. Quote
Next up is Xilinx , which is set to report first-quarter 2019 results. The stock carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter under review is pegged at 73 cents, representing significant year-over-year growth of 15.9%. Additionally, analysts polled by Zacks project revenues of roughly $672.2 million, up 9.2% from the year-ago quarter.
The company’s ongoing transition from a field programmable gate arrays (FPGA) provider to an all-programmable devices producer has been helping the company gain market share and counter stiff competition from the likes of Intel.
Xilinx is also riding high on its Data Center business, which it recognizes as the fasting growing one. The company’s focus on the business is further evident from the newly formed Data Center and TME (Testing, Measurement, and Emulation) segment, its new business segment starting this quarter. (Read More: Xilinx to Report Q1 Earnings: What's in the Cards?)
Xilinx, Inc. Price and Consensus
Xilinx, Inc. Price and Consensus | Xilinx, Inc. Quote
Another semiconductor company, Monolithic Power Systems Inc. (MPWR - Free Report) , is scheduled to report second-quarter 2018 results. The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $139.6 million and 90 cents per share, indicating growth of 24.4% and 32.4%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3.
Notably, the company has surpassed the Zacks Consensus Estimate in the trailing four quarters, recording an average positive surprise of 1.94%.
The increasing demand for analog Integrated Circuit (“IC”) and sensors, and deep-rooted partnerships with leading auto suppliers remains a tailwind. Monolithic Power expects its Served Addressed Market (“SAM”) for the automotive industry to expand significantly, bolstering revenues.
We anticipate the company to benefit from the ongoing Grantley to Purley platform conversion in the server market as well as from increased demand for servers due to the ongoing adoption of cloud computing. (Read More: Monolithic Power (MPWR - Free Report) Q2 Earnings: What's in the Cards?)
Monolithic Power Systems, Inc. Price and Consensus
Monolithic Power Systems, Inc. Price and Consensus | Monolithic Power Systems, Inc. Quote
Silicon Laboratories Inc. (SLAB - Free Report) , a global fabless semiconductor company involved in designing, developing and marketing mixed-signal analog intensive integrated circuits (ICs), will report second-quarter 2018 results. Analysts covering the stock believe the company will benefit from increasing demand for its IoT products across the automotive, industrial and consumer end markets. Nevertheless, stiff competition from NXP Semiconductors and Texas Instruments is a major headwind.
The Zacks Consensus Estimate for the company’s revenues and earnings is pegged at $214.5 million and 84 cents per share, respectively, indicating growth of 12.8% and 6.3%, respectively, on a year-over-year basis. The stock carries a Zacks Rank #3.
Silicon Laboratories, Inc. Price and Consensus
Silicon Laboratories, Inc. Price and Consensus | Silicon Laboratories, Inc. Quote
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>