Will FormFactor (FORM) Q2 Earnings Surprise Estimates? - Analyst Blog
FormFactor Inc. FORM is slated to report second-quarter 2015 results on Jul 29. In the last reported quarter, FormFactor recorded a positive earnings surprise of 150.00%. Let’s see how things are shaping up for this announcement.
Factors to Consider
FormFactor posted strong first-quarter results with both the top and bottom lines exceeding the Zacks Consensus Estimate.
Revenues were down 0.6% sequentially but up 26.6% from the year-ago quarter. The year-over-year increase was driven by SoC and DRAM customers as well as strong revenues from automotive and industrial applications. The sequential decline was due to the seasonal decreases in the company’s PC-related revenues and also due to a decline in mobile application processor business as customers shifted to new designs.
However, the company continues to see momentum from PC, server, mobile and mobile application processor projects, which will drive its SoC revenues. It expects microprocessor, industrial and automotive businesses to continue to perform well and drive results for the upcoming quarter.
For the second quarter, FormFactor expects revenues in the range of $71.0- $76.0 million. Non-GAAP gross margin is expected in the range of 34%- 37%. Non-GAAP operating expenses will likely be in the range of $20.0-$21.0 million. Cash flow is expected to be positive and in the range of $7 million to $9 million. The Zacks Consensus Estimate for revenues is pegged at $73.0 million.
Earnings Whispers?
Our proven model does not conclusively show that FormFactor will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 6 cents. Hence, the difference is 0.00%.
Zacks Rank: FormFactor’s Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some other companies, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
ZAGG Inc ZAGG, with Earnings ESP of +12.50% and a Zacks Rank #2 (Buy).
SBA Communications Corp. SBAC, with Earnings ESP of +75.00% and a Zacks Rank #2.
PerkinElmer Inc. PKI, with Earnings ESP of +1.70% and a Zacks Rank #2.
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 >>
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
PERKINELMER INC (PKI): Free Stock Analysis Report
FORMFACTOR INC (FORM): Free Stock Analysis Report
SBA COMM CORP (SBAC): Free Stock Analysis Report
ZAGG INC (ZAGG): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
