Cypress Semiconductor Corp
) is set to report first quarter 2013 results on Apr 18. Last
quarter it posted a 75% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors This Past Quarter
The company's sales growth rates in the fourth quarter were
down sequentially as well as year over year due to a seasonal
slowdown. The company saw some progress around its bookings,
which increased across all divisions, indicating that revenue
would pick soon.
The fourth quarter was weak for Cypress in terms of margin
growth. Unfavorable product mix, higher factory absorption
charges, and lower utilization and inventory reserves related to
the Ramtron acquisition impacted margins. Competitive pressures
also forced Cypress to lower prices, aggravating the margin
In the last quarter, the company restructured its business
divisions to lower operating expenses and focus on its core
initiatives. The company expects to pursue growth opportunities
in the touch-enabled Chinese device market, thus increasing
TrueTouch sales in 2013.
The Zacks Consensus Estimate for the first quarter stands at a
loss of 8 cents while that for fiscal 2013 stands at earnings of
Cypress has missed estimates once in the last four quarters,
while beating estimates thrice.
There have been no estimate revisions in the last 30, 60 and
90 days. As a result, the Zacks Consensus Estimate for the first
quarter as well as for 2013 remained unchanged over the last 30
and 60 days. But the Zacks Consensus Estimate for fiscal 2013
moved up significantly over the last 90 days. The stock carries a
Zacks Rank #2 (Buy).
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
Other Stocks to Consider
Our model states that astock needs to have both a positive
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
AMAZON.COM INC (AMZN): Free Stock Analysis
CYPRESS SEMICON (CY): Free Stock Analysis
NETFLIX INC (NFLX): Free Stock Analysis
SANDISK CORP (SNDK): Free Stock Analysis
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), with an ESP of +9.09% and a Zacks Rank #1 (Strong Buy)
), Earnings ESP of +5.56% and Zacks Rank #2 (Buy)
), Earnings ESP of +190.0% and Zacks Rank #3 (Hold)