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What to Expect From Cypress Semiconductor (CY) Q1 Earnings?

Zacks Equity Research

Cypress Semiconductor Corporation CY is slated to release first-quarter 2019 results on Apr 25.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with average positive surprise of 9.40%.

In the last reported quarter, its earnings and revenues surpassed the Zacks Consensus Estimate, and recorded year-over-year improvement on both counts.

For the first quarter, Cypress Semiconductor anticipates revenues in the range of $520-$550 million. The Zacks Consensus Estimate for revenues is pegged at $535.2 million.

Non-GAAP earnings for the quarter are anticipated in the range of 22-26 cents. The Zacks Consensus Estimate for the same is pegged at 24 cents.

The company anticipates non-GAAP gross margin between 46% and 46.5%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Cypress Semiconductor’s strength in the industrial and automotive segment and expanding presence in the IoT market, driven by acquisitions, product launches and consistent execution, are anticipated to boost the top line in the to-be-reported quarter as well.

Improving demand from industrial and Internet infrastructure, especially 4.5G and 5G customers for the company’s flash memory product, is likely to keep up the momentum in Memory Products Division (MPD). The Zacks Consensus Estimate for MPD revenues is pegged at $210 million.

Growth in microcontroller business and strong demand for PSoC products are expected to be tailwinds for Microcontroller and Connectivity Division (MCD) business in the quarter to be reported. However, slowdown across various MCD business units may impact this business unit. The Zacks Consensus Estimate for MCD revenues is currently pegged at $353 million.

Softness in the consumer end market and sluggish Microcontroller and Connectivity Division are concerns for the company’s upcoming results. Further, the ongoing trade tension between the United States and China is an overhang.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 or 5 (Sell rated) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cypress has an Earnings ESP of 0.00% and carries a Zacks Rank #3, which makes surprise prediction difficult.

Cypress Semiconductor Corporation Price and EPS Surprise

 

Cypress Semiconductor Corporation Price and EPS Surprise | Cypress Semiconductor Corporation Quote

Stocks That Warrant a Look

You may consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank.

Xilinx, Inc. XLNX has an Earnings ESP of +2.03% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verizon Communications Inc. VZ has an Earnings ESP of +0.03% and a Zacks Rank #3.

Waters Corporation WAT has an Earnings ESP of +1.23% and holds a Zacks Rank #3.

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