Markets

Semiconductor Stocks' Q4 Earnings on Feb 13: ON, AMKR & More

The peak of the fourth quarter earnings season is over with 319 S&P 500 members, representing 76.3% of the index's total market capitalization, having already reported their results.

As of Feb 8, total earnings of these companies were up 5.8% on a year-over-year basis (69.6% of the companies beat EPS estimates) while total revenue was up 4.5% on a year-over-year basis (54.5% of the companies beat top-line estimates).

Notably, earnings and revenue growth numbers are better than the recent quarters and growth looks poised to reach its highest level in the last two years. Also, total earnings are poised to reach a new quarterly record. However, positive earnings surprises are tracking low at this stage compared to the past.

As per our latest Earnings Outlook report, overall fourth-quarter earnings for S&P 500 companies are anticipated to be up 7.3% from the year-ago quarter on revenues that are estimated to increase 3.9%.

For the technology sector in particular, earnings are anticipated to be up 8.3% year over year based on 4.4% higher revenues. As of Feb 8, 86.1% of the sector's total market cap have already reported their earnings with 70.5% posting a beat on the bottom line.

Here we take a look at three semiconductor companies that are set to report their fourth-quarter 2016 earnings on Feb 13:

ON Semiconductor CorporationON is unlikely to beat estimates as it has an unfavorable combination of a Zacks Rank #4 (Sell) 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 .

This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings.

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

During the fourth-quarter, ON Semiconductor's Pocatello, ID facility was granted the Trusted Test status by the Department of Defense's (DoD) Defense MicroElectronucs Activity (DEMA) accreditation program. This is a major development for the company as it could translate to steady orders from the DoD going ahead and obviously augurs well for the company.

The company expanded its support in the Internet of Things (IoT) space with the introduction of a modular IoT Develoment Kit during the quarter. Given the growing demand for interconnected devices, this move looks aptly timed and bodes well for the company in the soon-to-be reported quarter.

We note that ON Semiconductor's results compared favorably with the Zacks Consensus Estimate in three of the last four quarters, resulting in an average positive surprise of 3.54%.

Shares of ON Semiconductor have outperformed the Zacks Semiconductor - Analog And Mixed industry over the last one year. While the industry gained 62.6%, the stock returned 95.2%.

ON Semiconductor Corporation Price and Consensus

ON Semiconductor Corporation Price and Consensus | ON Semiconductor Corporation Quote

Similarly, Amkor Technology, Inc.AMKR looks unlikely to beat earnings estimates as it has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of 0.00%.

Amkor's third-quarter results were above management expectations driven by strong smartphone demand across multiple tiers.

The company made noticeable progress in some of its key areas. Amkor's System-in-Package (SiP) business grew significantly. Also, automotive sales increased.

While end market demand is expected to remain stable with particular strength in China, where the company is picking up market share, uncertainties surrounding smartphone demand and currency fluctuations could impact the upcoming results.

Notably, Amkor's results have beaten the Zacks Consensus Estimate in three out of the preceding four quarters with an average positive surprise of 62.50%.

Also, shares of Amkor have underperformed the Zacks Electronics - Semiconductors industry over the last one year. While the industry gained 92.1%, the stock gained 89.0%.

Amkor Technology, Inc. Price and EPS Surprise

Amkor Technology, Inc. Price and EPS Surprise | Amkor Technology, Inc. Quote

GigPeak, Inc.GIG too is unlikely to beat estimates as it has an unfavorable combination of an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

GigPeak provides semiconductor ICs and software solutions. Its product lines consist of High-Speed Communications product line and Industrial product line. Its product portfolio consists of fiber-optics telecom, wireless backhaul, data communication and consumer electronics, mil-aero, instrumentation and medical equipment for applications.

The company holds a commanding position in the 40-gigabit per second space that has its applications in the burgeoning cloud market. This is a positive for the company and bodes well for its quarterly results.

However, a competitive landscape and foreign currency risk remain concerns for the soon-to-be reported quarter.

Notably, GigPeak's results have beaten the Zacks Consensus Estimate in three out of the preceding four quarters. It has an average four-quarter positive surprise of 37.50%.

Shares of GigPeak have underperformed the Zacks Electronics - Semiconductors industry over the last one year. While the industry gained 92.1%, the stock returned only 7.8%.

GigPeak, Inc. Price and EPS Surprise

GigPeak, Inc. Price and EPS Surprise | GigPeak, Inc. Quote

Where Do Zacks' Investment Ideas Come From?

You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>

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

Amkor Technology, Inc. (AMKR): Free Stock Analysis Report

ON Semiconductor Corporation (ON): Free Stock Analysis Report

GigPeak, Inc. (GIG): Free Stock Analysis Report

To read this article on Zacks.com click here.

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

ON AMKR

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