) is set to report second-quarter fiscal 2014 results on Apr 24.
Last quarter, it posted a 5.7% positive surprise. Let's see how
things are shaping up for this announcement.
Growth Factors This Past Quarter
Microsemi posted decent fiscal first quarter 2014 results with
both the top and bottom lines beating the Zacks Consensus
Estimate. The Communications market, which constituted 38% of
Microsemi's quarterly revenues, was particularly strong. Strength
was driven by Power over Ethernet (PoE) wireless products, which
found application in several new markets acted as a catalyst.
Also, strengthening telecom spending worldwide, including
emerging markets such as China and India are benefiting the
The company also launched several new products that should help
it increase penetration in existing markets and expand into new
ones. This, along with its improving end markets will boost its
For the second quarter, Microsemi expects revenues to increase
10%-14% sequentially. Gross margins are expected in the range of
54.5%-55.5% and non-GAAP earnings per share are expected to be
around 48 cents-54 cents per share.
Our proven model does not conclusively show that Microsemi 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 41 cents. Hence, the difference is 0.00%.
: Microsemi's Zacks Rank #3 (Hold) when combined with a 0.00% ESP
makes surprise prediction difficult.
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:
Advanced Energy Industries, Inc.
), with Earnings ESP of +10.00% and a Zacks Rank #1 (Strong Buy).
E-Commerce China Dangdang Inc.
), with Earnings ESP of +33.33% and a Zacks Rank #1.
ON Semiconductor Corp.
), with Earnings ESP of +6.67% and a Zacks Rank #1.
ADV ENERGY INDS (AEIS): Free Stock Analysis
E-COMMRC CH-ADR (DANG): Free Stock Analysis
MICROSEMI CORP (MSCC): Free Stock Analysis
ON SEMICON CORP (ONNN): Free Stock Analysis
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