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CyberOptics (CYBE) to Report Q2 Earnings: What's in Store?

CyberOptics Corporation CYBE is slated to release second-quarter 2020 results on Jul 23.

The company expects net sales in the range of $15.5-$17.5 million for the to-be-reported quarter. The mid-point of the guidance, which is $16.5 million, indicates 9.7% year over year growth from the year-ago quarter’s reported figure of $15 million.

The Zacks Consensus Estimate for second-quarter earnings has been steady at 5 cents per share in the past 30 days. The estimate indicates year-over-year decline of 16.7% from the year-ago quarter’s figure.

Q1 at a Glance

In first quarter 2020, the company reported revenues of $16.4 million, up 10% from the year-ago quarter’s reported figure but down 3% sequentially.

Earnings during the quarter were 11 cents per share, up 57.1% from the year-ago quarter’s reported quarter and 450% sequentially.

Let’s see how things have shaped up prior to this announcement.

CyberOptics Corporation Price and EPS Surprise

CyberOptics Corporation Price and EPS Surprise

CyberOptics Corporation price-eps-surprise | CyberOptics Corporation Quote

Factors Likely to Have Influenced Q2

CyberOptics’s second-quarter performance is expected to have benefited from the solid traction for its 2D and 3D MX memory module inspection systems. Notably, two out of the three largest memory manufacturers in the world are now using the company’s memory module products.

Moreover, growing momentum of semiconductor sensors is likely to have contributed to the company’s top-line growth in the to-be-reported quarter. The momentum is being driven by higher demand from data center and 5G customers due to coronavirus crisis-induced rapid deployment of technologies like edge computing, IoT and cloud networks.

Further, CyberOptics is witnessing solid demand for SQ3000 Multi-Function systems, which the company expects to have continued in the second-quarter. Demand is stemming from the increased production of micro LED-based technology, which is being used for the backlights in laptops and smartphones.

CyberOptics also expanded its memory modules portfolio with the launch of the 3D MX3000 Final Vision Inspection (FVI) system in the first quarter. This new memory module inspection system features two high-resolution Multi-Reflection Suppression (MRS) sensors that deliver precise, dual-sided final vision inspection and doubles productivity. These features are likely to have boosted incremental adoption in the to-be-reported quarter, which in turn is expected to have driven the top line.

Increasing popularity of the company's products instill confidence in the stock. Notably, shares of the company have surged 101.4% in the year-to-date period against the industry’s decline of 1.3%.

Additionally, CyberOptics stated that the ongoing coronavirus pandemic had minimal impact on its business operations, which bodes well for the company’s performance during the quarter under review.

However, increasing investments in Research & Development, and product enhancements, is expected to have weighed on margin expansion in the second quarter. Moreover, the company expects semiconductor sensor sales to have declined slightly in the second quarter due to sluggish demand in the automotive sector, which is an overhang.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for CyberOptics this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

CyberOptics has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may consider as our proven model shows that these have the right mix of elements to beat estimates this time:

Anaplan, Inc. PLAN has an Earnings ESP of +1.64% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Microchip Technology Incorporated MCHP has an Earnings ESP of +2.38% and a Zacks Rank of 1.

Etsy, Inc. ETSY has an Earnings ESP of +23.66% and a Zacks Rank of 2.

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