Camtek (CAMT) to Report Q3 Earnings: What's in the Cards?

Camtek Ltd.CAMT is scheduled to report third-quarter 2018 results on Oct 31.

Notably, the company has surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 2.27%.

In the last reported quarter, Camtek posted non-GAAP earnings of 13 cents per share, which increased 116.7% year over year and 8.4% sequentially. The figure came in line with the Zacks Consensus Estimate.

Revenues increased 34% year over year and 11.7% sequentially to $30.5 million. The company also topped the Zacks Consensus Estimate of $30 million. Top-line growth was driven by strong performance of the company across all the end markets, especially in Asia which contributed 81% to the total revenues in the second quarter.

For the third quarter, the company expects revenues to lie between $31 million and $32 million, reflecting year-over-year growth of 30%. The Zacks Consensus Estimate is pegged at $31.5 million. Further, the consensus estimate for earnings is projected at 14 cents per share.

Coming to the price performance, shares of Camtek have returned 28.5% on a year-to-date basis, outperforming the industry 's rally of 20.4%.

Let's see how things are shaping up for this quarter.

Factors at Play

The company's robust product portfolio is expected to continue aiding its performance across all the end markets.

The company's strengthening metrology business is likely to sustain momentum with the support of its new platform called EagleT-AP. Its growing orders from OSAT and memory manufacturers remain positive.

Further, Camtek's increasing exposure in the front-end equipment market remains a catalyst. Its expanding macro defect inspection business and strengthening relationship with VCSEL manufacturers on the back of its robust inspection systems are likely to aid revenue generation in this market.

Furthermore, the company's strong focus toward expanding its footprint in the 2D inspection space will continue to drive its top-line growth. The company's side wall crack inspection technology for post dicing application continues to perform well. Further, Camtek is witnessing robust customer addition in this particular space.

During the third quarter, the company acquired an order from a tier-one OSAT for its 2D high-throughput 2D inspection system. This along with the expansion of Camtek's 2D business in the three existing tier one accounts has bolstered its share in the 2D inspection market.

Additionally, the company remains optimistic about its concerted focus on the semiconductor industry, especially in the advance packaging segment where advancement in the production technology requires metrology solutions and advanced inspection systems.

All these factors are anticipated to drive the company's to-be reported quarter results.

However, ongoing trade tension between the United States and China remains a concern as it is making the semiconductor market sluggish. This does not bode well for the company's growing focus on semiconductor industry.

Camtek Ltd. Price and EPS Surprise

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

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has 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.

Camtek currently has a Zacks Rank #3 and an Earnings ESP of 0.00%, making the surprise prediction difficult.

Stocks That Warrant a Look

Here are few stocks worth considering as our model shows that it has the right combination of elements to deliver an earnings beat in the upcoming releases.

AMETEK AME has an Earnings ESP of +0.71% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Box BOX has an Earnings ESP of +5.41% and a Zacks Rank #3

Analog Devices ADI has an Earnings ESP of +1.75% and Zacks Rank #3.

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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.

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

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