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Cognex (CGNX) to Post Q2 Earnings: What's in the Offing?

Cognex Corporation CGNX is set to report second-quarter 2020 results on Jul 29.

For the quarter, Cognex has not provided any projection due to coronavirus-related supply-chain disruptions.

The Zacks Consensus Estimate for revenues currently stands at $147.7 million, implying a 25.8% decline from the year-ago quarter’s reported figure. The consensus mark for non-GAAP earnings per share stands at 10 cents, suggesting a 64.3% year-over-year decline.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 84.97%.

Let’s see how things are shaping up for the upcoming announcement.

Cognex Corporation Price and EPS Surprise

Cognex Corporation Price and EPS Surprise

Cognex Corporation price-eps-surprise | Cognex Corporation Quote

Factors at Play

Demand crunch in the overall factory automation market, particularly in Europe and the Americas, is expected to have negatively impacted the company’s overall second-quarter financial performance.

Moreover, some deferrals of logistics revenues are expected to have kept margins under pressure. The company expects gross margin to be around the mid-70s range.

Nonetheless, Cognex’s cost-cutting measures, including reducing travel, hiring and discretionary expenses, are anticipated to have somewhat offset the negative impact of the aforementioned factors. In its last earnings call, the company had mentioned that it plans to cut its operating expenses by more than 10% sequentially.

Additionally, efficient supply-chain management is expected to have benefited the company’s performance in the second quarter. Further, with the lockdown lifted in China, majority of the manufacturers are ramping up production. This is expected to have been a positive during the second quarter.

What Our Model Says

The proven Zacks model predicts an earnings beat for Cognex this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cognex has a Zacks Rank #3 and an Earnings ESP of +11.80%.

Other Stocks to Consider

Here are other some companies, which, per our model, have the right combination of elements to post an earnings beat this season:

Synaptics SYNA has an Earnings ESP of +10.60% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook FB has an Earnings ESP of +5.28% and a Zacks Rank of 3.

Alphabet GOOGL has an Earnings ESP of +0.32% and a Zacks Rank of 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.

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