Maxim Integrated Products
) is set to report fourth quarter fiscal 2013 results on Jul 25.
Last quarter, it posted a 7% positive surprise. Let's see how
things are shaping up for this announcement.
Growth Factors this Past Quarter
Despite posting a year-over-year increase in the top line,
primarily boosted by consumer and computing end markets; higher
costs and the resultant contraction in margins kept the lid on
However, management is positive about the automotive end
market as it clinched several design wins in the last quarter.
Steady growth in distributor design registrations also boosted
revenues. Maxim also witnessed stronger demand for its femtocell
Further, Maxim started shipping for Samsung's flagship device,
S4. It also expanded its product portfolio to sensors, motion
control and other areas of smartphones, tablets and hybrid
devices, which will increase its dollar content per device.
The Zacks Consensus Estimate for the fourth quarter stands at
47 cents per share while that for fiscal 2013 stands at
Maxim has surpassed estimates in the trailing four quarters,
which resulted in an average positive surprise of 8.57%. We
believe that Maxim has the potential to beat expectations in the
upcoming quarter as well.
The last 30 days saw no estimate revisions for both the fourth
quarter and fiscal 2013. As a result, the Zacks Consensus
Estimates for both periods have remained unchanged.
The chances of a big surprise are unlikely given the lack of
catalysts during the quarter. The stock carries a Zacks Rank #4
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 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:
), Earnings ESP of +8.33% and a Zacks Rank #2 (Buy).
Huron Consulting Group Inc.
), Earnings ESP of +1.64% and a Zacks Rank #2 (Buy).
), Earnings ESP of +1.96% and a Zacks Rank #2 (Buy).
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