Markets

Is a Beat in Store for Synaptics (SYNA) in Q4 Earnings?

Synaptics Inc.SYNA is set to report fiscal fourth-quarter 2018 results on Aug 9.

The company beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 2.99%.

In the last reported quarter, the company's earnings of 92 cents per share beat the Zacks Consensus Estimate by a couple of cents. However, the figure was down 27.6% from the year-ago quarter.

Revenues of $394 million fell short of the Zacks Consensus Estimate of $401 million and declined 11.3% on a year-over-year basis.

For fiscal fourth-quarter 2018, the company anticipates revenues in the range of $370-$410 million.

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

Factors at Play

Synaptics is well poised to benefit from a diversified product portfolio and investments in infinity displays and consumer IoT.

In the last reported quarter, Consumer IoT products (22.6%) revenues came in at $89.0 million. Per the company data, approximately $23.6 million of mobile product revenues had been reclassified as Consumer IoT revenues for the third quarter of fiscal 2018. Automotive, VR, as well as voice and video-enabled products are gaining traction.

The company's AudioSmart, ImagingSmart and VideoSmart solutions are gaining wide scale adoption, which is a further positive. New design wins in IoT provided further impetus.

Notably, the acquisitions of Conexant Systems and Multimedia Solutions Business of Marvell Technology Group are helping it expand its customer base.

Synaptics' focus on enhancing in-display fingerprint sensing, Touch and Display Driver Integration (TDDI) and OLED DDIC portfolio will help it counter the growing headwinds. The company expects the introduction of chip-on-film to provide new growth opportunity.

In the to-be-reported quarter, Synaptics announced that a "member of the FS9500 Clear ID family of optical in-display fingerprint sensors" was adopted by Xiaomi for its Mi8 Transparent Adventure smartphones.

However, declining revenues from mobile products due to weakness in the smartphone market is anticipated to hurt the company's top line. Spot shortages on TDDI and DDIC products is another concern.

Synaptics Incorporated Price and EPS Surprise

Synaptics Incorporated Price and EPS Surprise | Synaptics Incorporated 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 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.

Synaptics has a Zacks Rank #3 and its Earnings ESP is +3.83%.

Other Stocks With a Favorable Combination

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

Vishay Intertechnology, Inc. VSH has an Earnings ESP of +2.41% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

NVIDIA Corporation NVDA has an Earnings ESP of +0.48% and a Zacks Rank #3.

Avnet AVT has an Earnings ESP of +1.37% and a Zacks Rank #2.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Synaptics Incorporated (SYNA): Free Stock Analysis Report

Avnet, Inc. (AVT): Free Stock Analysis Report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

Vishay Intertechnology, Inc. (VSH): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

NVDA SYNA VSH AVT

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More