Xilinx Inc.XLNX is set to report fourth-quarter fiscal 2017 results on Apr 26. Last quarter, the company posted a positive earnings surprise of 6.12%. Notably, the stock surpassed the Zacks Consensus Estimate in all the four trailing quarters, with an average positive surprise of 8.46%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Xilinx designs and manufactures a broad range of high-performance, high-density programmable logic devices (PLDs), such as field-programmable gate arrays (FPGAs) and complex-programmable logic devices (CPLDs).
For the past few quarters, the company has been witnessing strong sales of its 16nm, 20nm, and 28nm products, mainly due to solid demand across markets such as data center, automotive, test & measurement, wired and wireless communications and space.
We believe that increasing demand for 28-nm, 20-nm and 16-nm nodes, driven by the aforementioned factors, will support growth in the to-be-reported quarter. The company's product launches should further aid revenues.
Nonetheless, a slowdown in the Chinese economy, along with economic weakness in Europe, and the Asia-Pacific region are likely to affect the company's near-term results. Also, competition from Lattice Semiconductor Corporation LSCC remains a material headwind.
Xilinx, Inc. Price, Consensus and EPS Surprise
Our proven model does not conclusively show that Xilinx is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: The Earnings ESP for Xilinx is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 54 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Zacks Rank: Xilinx carries a Zacks Rank #3. Though a Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company's ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks, which you may consider as our model shows that they have the right combination of elements to post an earnings beat in their upcoming releases:
Seagate Technology plc STX , with an Earnings ESP of +3.77%, and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .
Fiserv Inc. FISV , with an Earnings ESP of +0.85% and a Zacks Rank #2.
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