What's in Store for QuickLogic (QUIK) this Earnings Season?

Semiconductor solutions provider QuickLogic CorporationQUIK is scheduled to report third-quarter 2016 earnings results after the closing bell on Nov 2. QuickLogic met earnings estimates thrice in the trailing four quarters. Let's see how things are shaping up for this announcement.

Key Factors to Consider

QuickLogic expects an increase in operating expenditure, primarily driven by engineering expenses associated with the release and the ongoing development of certain hardware and software solutions. Also, the company is aggressively seeking patents to protect its new innovations and has several key patent applications that are still pending.

During the quarter, QuickLogic implemented a strategic re-alignment measure which resulted in the reduction of eight employees. The company expects to incur a onetime severance charge of approximately $170 million in the to-be-reported quarter.

The semiconductor industry is characterized by intense price competition and lower margins as order volumes increase. While winning large volume sales opportunities will increase revenue, these opportunities might decrease gross profit margin in the to-be-reported quarter, thereby affecting the bottom line.

However, QuickLogic continues to expect solid revenues from sensor processing solutions that will likely offset anticipated declines in smart connectivity, display bridge and legacy product revenues. The company presently has engagements with four of the top ten smartphone companies in the world. In addition, QuickLogic is also closely engaged with several of the largest and most widely recognized wearable device manufacturers in the world. This proves that its Sensor Processing Solution strategy is resonating with market leaders across the globe and is likely to yield incremental revenues.

QUICKLOGIC CORP Price and EPS Surprise


Earnings Whispers

Our proven model does not conclusively show that QuickLogicis likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for a successful earnings beat. This is not the case here as you will see below:

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and Zacks Consensus Estimate, is currently at 0.00%.

Zacks Rank: QuickLogichas a Zacks Rank #3 (Hold). This when combined with a 0.00% ESP makes earnings prediction uncertain.

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

Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Avon Products Inc. AVP has an Earnings ESP of +33.33% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

ACI Worldwide, Inc. ACIW has an Earnings ESP of +6.25% and a Zacks Rank #3.

AMN Healthcare Services Inc AMN AMN has an Earnings ESP of +1.79% and a Zacks Rank #3.

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QUICKLOGIC CORP (QUIK): Free Stock Analysis Report

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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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