) is set to report second-quarter 2014 results on Jul 30. Last
quarter, it posted a 43.6% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
FormFactor posted encouraging first quarter 2014 results with both
the top and bottom lines beating the Zacks Consensus Estimate. The
company witnessed strong momentum in the System on Chip business
with escalating customer attention on the company's product
solutions, including its copper pillar test solutions, mainly
driven by mobile, industrial and automotive applications.
It also made noteworthy progress in recovering from
customer-specific DRAM problem that it faced in 2013. Revenues for
DRAM products also increased. The increase was primarily driven by
high demand for mobile computing and favorable pricing in the
quarter. Furthermore, the revival of business due to better
implementation and revitalization at SK Hynix also contributed to
These developments will enable FormFactor to both re-engage with
consumers and initiate new technologies into its operational
practices. Additionally, management's recent decision to focus on
the mobile segment is likely to be beneficial.
For the second quarter, FormFactor expects revenues in the range of
$62.0−$66.0 million. Non-GAAP gross margin is expected to be in the
range of 31%-34%. Non-GAAP operating expenses are expected to be
$19.0-$20.0 million. Cash flow is expected to be breakeven to
positive $3 million.
Our proven model does not conclusively show that FormFactor will
beat estimates 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 a 4 cents per share. Hence, the difference is 0.00%.
: FormFactor's Zacks Rank #1 (Strong Buy), when combined with a
0.00% ESP makes surprise prediction difficult. We need to have a
positive ESP to be confident about an earnings surprise.
We caution against stocks with Zacks Ranks #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
Here are some other companies, which you may want to consider as
our model shows that they have the right combination of elements to
post an earnings beat this quarter:
Charter Communications, Inc. (
), with Earnings ESP of +375.00% and a Zacks Rank #1
Synaptics Inc. (
), with Earnings ESP of +4.07% and a Zacks Rank #1
TIM Participacoes S.A. (
), with Earnings ESP of +16.67% and a Zacks Rank #1
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FORMFACTOR INC (FORM): Free Stock Analysis
CHARTER COMM-A (CHTR): Free Stock Analysis
TIM PARTICP-ADR (TSU): Free Stock Analysis
SYNAPTICS INC (SYNA): Free Stock Analysis
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