Microsemi Corporation ( MSCC ) is set to
report its second quarter 2013 results today after markets close.
In the prior quarter, the company posted a 2% negative earnings
surprise. Let's see how things are shaping up for this
Growth Factors this Past Quarter
Microsemi reported a disappointing first quarter due to weakness
in the communications, aerospace and industrial markets. Although
Microsemi has benefited from growing electronic content in the
defense & security space, lower Department of Defense (DoD)
spending due to U.S. military budget constraints may impact its top
However, Microsemi's gross margin improved due to growing sales
of new higher-margin products and a reduction in operating costs
due to headcount reduction. Management is also positive that demand
in the communications market may improve and believes that key
customers such as A&T will generate steady demand.
The Zacks Consensus Estimate for the second quarter stands at 30
cents while that for fiscal 2013 stands at $1.53.
Microsemi posted negative surprises in the first quarter of 2013
and second and fourth quarter of 2012. Its results were in line
with the Zacks Consensus Estimate in the third quarter of 2012.
This resulted in an average negative surprise of 3.29% for the
preceding four quarters.
No estimate revisions were noticed for both the second quarter
and fiscal 2013 over the past 30 days. As a result, the Zacks
Consensus Estimate has remained unchanged for the second quarter as
well as for 2013.
The chances of a big surprise are unlikely given the lack of
catalysts during the quarter. The stock carries a Zacks Rank #3
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
Our model states that a stock needs to have both a positive
Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method ) and a
Zacks Rank #1, #2 or #3 to beat earnings estimates. You could,
therefore, consider the following stocks as our model shows that
they have the right combination of elements to post an earnings
beat this quarter:
LinkedIn Corp. ( LNKD ), Earnings ESP
of +300.0% and Zacks Rank #3 (Hold)
Intersil Corp. ( ISIL ), Earning ESP of
+62.5% and Zacks Rank #3
Amazon.com ( AMZN ), Earnings ESP
of +100.0% and Zacks Rank #3AMAZON.COM INC (AMZN): Free Stock Analysis
ReportINTERSIL CORP (ISIL): Free Stock Analysis
ReportLINKEDIN CORP-A (LNKD): Free Stock Analysis
ReportMICROSEMI CORP (MSCC): Free Stock Analysis
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