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Key Forecasts for Tech Stock Q1 Earnings on May 2: AME & More


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The Q1 earnings season has crossed the half-way mark, with results from 267 S&P 500 members having on board as of Apr 27.

Per the latest Earnings Preview , approximately 76.8% of the companies delivered positive earnings surprises, while 73.8% surpassed top-line expectations. Further, 61.4% of these companies have topped the estimates on both the fronts. Earnings of these companies grew 25.1% from the year-ago quarter, while revenues were up 10%.

Robust Performance From Tech Stocks

Technology is one of the 13 sectors which are anticipated to report double-digit earnings growth this quarter.

As of Apr 27, 64.7% S&P 500 companies belonging to the Tech sector have reported their first-quarter results, wherein earnings for these companies increased 31.3% year over year on 11.4% higher revenues.

The sector's double digit year-over-year growth so far in the quarter under review can be attributed to robust performance from tech giants like Facebook, Amazon, Netflix, Intel, Microsoft and Google.

The tech sector experienced a tough first-quarter due to headwinds related to Trump's trade restrictions, increasing regulatory actions in Europe, and growing concern over data privacy and security post Facebook's Cambridge Analytica fiasco.

However, strong results proved that the sector hasn't lost its mojo. Despite significant negative press, Facebook delivered impressive results driven by higher mobile ad revenues, expanding user base and growing instagram.

Amazon crushed estimates driven by expanding Amazon Web Services (AWS) customer base and Prime growth. Microsoft Azure continued its solid growth during the quarter.

The increasing demand for semiconductor chips that harnesses cloud computing and emerging trends of artificial intelligence (AI) and machine learning drove results for Intel. Moreover, increasing demand for solutions related to self-driving vehicles and Internet of Things (IoT) boost top-line growth.

Total earnings for the tech sector are now expected to increase 27.9%, while revenues are expected to grow 12.5% higher on a year-over-year basis.

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Here we take a look at four companies which belong to electronic industry and are set to report first-quarter results on May 2.

AMETEK, Inc. AME , based in Berwyn, PA, is a leading manufacturer of electronic appliances and electromechanical devices. We believe an expanding product portfolio will continue to aid the company's performance in the going-to-be reported quarter.

Moreover, the execution of its four core growth strategies - operational excellence, global market expansion, investments in product development and strategic acquisitions are expected to continue benefiting AMETEK's first-quarter results. (Read more: AMETEK (AME) Warms Up to Q1 Earnings: What's in the Offing? )

However, AMETEK currently has a Zacks Rank #2 and its Earnings ESP of -0.14%. Thus, the company's earnings are unlikely to beat estimates this time.

AMETEK, Inc. Price and EPS Surprise

AMETEK, Inc. Price and EPS Surprise | AMETEK, Inc. Quote

Garmin Ltd. GRMN , based in Olathe, KS, is an original equipment manufacturer of navigation and communication equipment that uses GPS-based technology.

We believe continued focus on product innovation and market expansion will continue to provide growth opportunities in all business segments.

Further, an expanding product portfolio is likely to boost the top-line growth of Garmin. Recent launch of Ultra High-Definition scanning sonar, Garmin Speak Plus, GPS running watch and a new generation of 7-inch truck navigators are likely to improve to the customer base of the company in soon-to-be reported quarter.

Notably, Garmin has topped the Zacks Consensus Estimate in all the trailing four quarters, with an average beat of 10.79%.

The company currently has a Zacks Rank #3. Though the rank is favorable, its 0.00% Earnings ESP makes earnings prediction difficult.

Garmin Ltd. Price and EPS Surprise

Garmin Ltd. Price and EPS Surprise | Garmin Ltd. Quote

Littelfuse, Inc. LFUS , based in Chicago, IL, is a designer and manufacturer of circuit protection products. The company has surpassed the Zacks Consensus Estimate twice while reporting in-line results in the remaining two of the trailing four quarters, delivering an average positive earnings surprise of 2.7%.

Littelfuse has a favorable combination of a Zacks Rank #2 and an Earnings ESP of +1.10% which shows that the company is likely to beat on earnings in the first quarter. You can see the complete list of today's Zacks Rank #1 stocks here.

Littelfuse, Inc. Price and EPS Surprise

Littelfuse, Inc. Price and EPS Surprise | Littelfuse, Inc. Quote

Orbotech Ltd. ORBK , based in Yavne, Israel, is a developer of yield-enhancing and process-enabling solutions for circuit boards and other electronic components. The company has reached a definitive agreement to be acquired by KLA-Tencor.

The company has topped the Zacks Consensus Estimate in three of the trailing four quarters while missing in one with an average positive earnings surprise of 3.93%.

Orbotech presently has a Zacks Rank #3 but its Earnings ESP is 0.00% which makes earnings beat prediction difficult in the quarter under view.

Orbotech Ltd. Price and EPS Surprise

Orbotech Ltd. Price and EPS Surprise | Orbotech Ltd. Quote

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: ORBK , LFUS , GRMN , AME



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