Nova (NVMI) to Report Q3 Earnings: What's in the Offing?

Nova Measuring Instruments Ltd.NVMI is set to report third-quarter 2018 results on Nov 1.

We note that the company has outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering an average positive surprise of 21%.

In the last reported quarter, Nova delivered non-GAAP earnings of 46 cents per share, recording a positive surprise of 9.52%. However, the figure declined 13.2% year over year and 14.8% sequentially.

Revenues increased 10.3% year over year but declined 1.1% sequentially to $61.9 million. Notably, the figure surpassed the Zacks Consensus Estimate of $61 million. The year over year growth was attributed to strengthening customer base of the company. Moreover, strong contributions from the company's memory customers drove the top line.

For the third quarter, the company expects non-GAAP earnings to lie between 37 cents and 49 cents per share. Further, the revenues are projected to be in the range of $58-$64 million.

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

Nova Measuring Instruments Ltd. Price and EPS Surprise

Nova Measuring Instruments Ltd. Price and EPS Surprise | Nova Measuring Instruments Ltd. Quote

Factors at Play

Nova's diversified technology portfolio serving various types of customers remains its key growth driver and is expected to aid the to-be-reported quarter results. Further, its strong presence in China is a major catalyst.

Further, the company's expanding footprint in the front-end semiconductor supply chain remains positive. Moreover, Nova's strengthening memory portfolio and enhancements in the 3D NAND market are boosting its presence in the semiconductor industry. These factors are likely to aid its primary growth drivers..

Additionally, the company's increasing foundry spending on Logic node below 7-nanometer will continue to aid growth in the orders received.

Furthermore, its robust metrology solutions portfolio comprising of OCD metrology and integrated X-ray metrology offerings are likely to continue aiding its momentum in the memory space.

Also, growing adoption of Nova's latest metrology solutions - i550 integrated metrology, T600 NMSR standalone, VeraFlex III plus XPS and the Nova Fleet software engines are expected to drive the top line in the to-be-reported quarter.

However, the sluggishness in the memory spending globally remains a concern for the company's business growth.

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.

Nova 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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