Applied Materials, Inc.
) is set to report third-quarter 2014 results on Aug 14. Last
quarter, the company posted in-line results. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
The company's second-quarter earnings were in line with the
Zacks Consensus Estimate. Revenues of $2.35 billion were up 7.4%
sequentially and 19.3% year over year, benefiting from the
proliferation of mobile devices.
The first quarter was strong for Applied Materials in terms of
margin growth, driven by improving mix of higher-value products in
semiconductor and display as well as material cost efficiencies
For the third quarter, Applied Materials expects revenues to be
flat to down 5% sequentially with non-GAAP earnings per share
coming within 25-29 cents.
Our proven model does not conclusively show that Applied
Materials will beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 27 cents. Hence, the difference is 0.00%.
Appliedhas a Zacks Rank #4 (Sell) which when combined with a 0.00%
ESP, makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revision momentum.
Other Stocks to Consider
You could consider other stocks with a positive Earnings ESP and
a favorable Zacks Rank such as:
Myriad Genetics Inc. (
), with an Earnings ESP of +4.35% and a Zacks Rank #1 (Strong
Medtronic, Inc. (
), with an Earnings ESP of +1.09% and a Zacks Rank #2 (Buy).
Callon Petroleum Company (
), with an Earnings ESP of +5.56% and a Zacks Rank #2.
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