Cypress Semiconductor Corporation
) is set to report second-quarter 2014 results on Jul 17. Last
quarter, it posted a 125% positive surprise. Let's see how things
are shaping up for this announcement.
Factors this Past Quarter
The company's first-quarter loss was narrower than the Zacks
Consensus Estimate by 3 cents due to tight operating expense
control. Also, revenues were above the higher end of management's
guidance on the back of improvement in all divisions, especially
continued higher demand for TrueTouch products.
Gross margins were down 20 basis points year over year due to
unfavorable product and customer mix.
For the second quarter, Cypress expects revenues in the range of
$181.0-$186.0 million, and gross margin to be approximately 51.0%,
which will vary with manufacturing product mix. Non-GAAP earnings
per share are likely to be in the range of 11-13 cents. The Zacks
Consensus Estimate for earnings is pegged at 3 cents, much lower
than the company's guided range.
Our proven model does not conclusively show that Cypress is
likely to 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 3 cents. Hence, the difference is 0.00%.
Cypress' Zacks Rank #3 (Hold) 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 revisions momentum.
Other Stocks to Consider
You could consider other stocks with a positive Earnings ESP and
a Zacks Rank #1, 2 or 3 such as:
), with anEarningsESP of +2.08% and a Zacks Rank #1 (Strong
), with an Earnings ESP of +3.13% and a Zacks Rank #1.
), with an Earnings ESP of +3.08% and a Zacks Rank #1.
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