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Cypress Semiconductor (CY) Q3 Earnings: What's in Store?

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Cypress Semiconductor CorporationCY is set to report third-quarter 2015 results on Oct 22. Last quarter, the company reported in-line earnings.

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

Factors at Play

Cypress offers high-performance, mixed signal and programmable solutions. In the second quarter, the company's earnings matched the Zacks Consensus Estimate, but revenues missed the same.

We remain optimistic about the synergies associated with Cypress' merger with Spansion. The new company is a global provider of microcontrollers and specialized memory chips for embedded systems. The integration remains well on track and the company is witnessing new opportunities at top-tier customers, particularly in the automotive market.

However, weak and uncertain macro environment and intensifying competition remain the concerns.

Management expects third-quarter revenues in the range of $490.0-$520.0 million. Consolidated gross margin is likely to be approximately 41.5%, depending on the utilization, product and customer mix.

Earnings Whispers

Our proven model does not conclusively show that Cypress is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 10 cents. Hence, the difference is 0.00%.

Zacks Rank: Cypress has a Zacks Rank #4 (Sell).

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some companies which you may consider instead, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Pandora Media, Inc. P with an Earnings ESP of +50.00% and a Zacks Rank #1.

Anika Therapeutics Inc. ANIK , with an Earnings ESP of +2.94% and a Zacks Rank #1.

SkyWest Inc. SKYW , with an Earnings ESP of +4.55% and a Zacks Rank #1.

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CYPRESS SEMICON (CY): Free Stock Analysis Report

SKYWEST INC (SKYW): Free Stock Analysis Report

PANDORA MEDIA (P): Free Stock Analysis Report

ANIKA THERAPEUT (ANIK): Free Stock Analysis Report

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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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