Ultra Clean (UCTT) to Report Q3 Earnings: What's in Store?

Ultra Clean Holdings UCTT is set to report third-quarter 2020 results on Oct 28.

For the quarter, the company expects revenues between $320 million and $360 million. Non-GAAP earnings are expected in the 56-72 cent per share range.

The Zacks Consensus Estimate for revenues is pegged at $340.3 million, indicating growth of 33.8% from the figure reported in the year-ago quarter.

The consensus mark for third-quarter earnings has been unchanged at 64 cents per share over the past 30 days. The figure indicates growth of 204.8% from the figure reported in the year-ago quarter.

Notably, Ultra Clean’s earnings beat the Zacks Consensus Estimate in the trailing four quarters by an average of 39.2%.

Ultra Clean Holdings, Inc. Price and EPS Surprise


Ultra Clean Holdings, Inc. Price and EPS Surprise

Ultra Clean Holdings, Inc. price-eps-surprise | Ultra Clean Holdings, Inc. Quote

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

Factors to Consider

Ultra Clean’s third-quarter 2020 results are expected to have benefited from a strong portfolio of offerings that has positioned it well to capitalize on the growing demand for technology that supports 5G wireless, high-performance cloud computing, IoT and AI.

With an increase in WFE investment, the company’s cleaning and analytical services are likely to have become more critical to its integrated device manufacturer and original equipment manufacturer (OEM) customers to support the production of leading next-gen devices.

Moreover, continued strength in foundry and logic spending is expected to have driven top-line growth. Additionally, its OEM customers are likely to have shifted more toward outsourcing rather than in-house, which is likely to have aided its DRAM business.

However, coronavirus-led disruptions as well as absence of subsidy ($2 million from China and Singapore) are expected to have hurt the company’s gross margin and bottom line on a sequential basis.

Key Q3 Development

During the to-be-reported quarter, Ultra Clean announced its expansion into Malaysia through the opening of a manufacturing facility in the BatuKawan Industrial Park, Pulau Pinang. The facility increases its total capacity by roughly 50% and improves the cost profile.

What Our Model Indicates

Per the Zacks model, 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.

Ultra Clean has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

AMETEK AME has an Earnings ESP of +0.83% and is #2 Ranked. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alphabet GOOGL has an Earnings ESP of +7.40% and a Zacks Rank #2.

Apple AAPL has an Earnings ESP of +2.97% and is #3 Ranked.

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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.

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