Factors to Note Ahead of Dolby's (DLB) Q4 Earnings Release
Dolby Laboratories Inc DLB is slated to report fourth-quarter fiscal 2023 results on Nov 16.
The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $286.4 million, indicating an increase of 2.9% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at 52 cents per share, indicating a year-over-year decrease of 3.7%.
The company expects GAAP EPS of 10-30 cents and non-GAAP EPS of 40-60 cents on revenues of $275-$305 million for the same period.
Dolby Laboratories Price and EPS Surprise
Dolby Laboratories price-eps-surprise | Dolby Laboratories Quote
Factors to Note
The company’s quarterly performance is likely to have benefited from the increasing adoption of Dolby Atmos, Dolby Vision and new imaging patents. It expects revenues from these businesses to grow in the range of 15-25% in fiscal 2023, driven by continued momentum in the broadcast and other markets.
Dolby is also expanding its reach in the automotive market, with more than a dozen auto partners added in the past year. In the last quarter, NIO and Lotus launched car models that support Dolby Atmos in Europe.
The company benefits from the adoption of Dolby.io, a platform that enables developers to build immersive online experiences. The growing demand for high-quality, ultra-low latency applications is another tailwind. Additionally, strong growth in Dolby Cinema as the box office improves from pandemic lows is a major advantage.
Also, DLB’s initiatives to boost growth in newer areas like music, automotive and user-generated content bode well. In the last quarter, Max launched its top-tier service with Dolby Atmos and Dolby Vision.
However, lower shipments in PC and consumer electronics are weighing on Dolby’s performance. As a result, the company expects its audio revenues to decline by low-single digits during fiscal 2023. Rising research and development costs to fend off stiff competition and uncertain macroeconomic conditions continue to strain DLB’s margins.
What Our Model Says
Our proven model does not predict an earnings beat for Dolby this time around. 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.
DLB has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With a Favorable Combination
Here are some stocks you may consider, as our proven model shows that these have the right mix of elements to beat on earnings this time around.
Walmart WMT has an Earnings ESP of +0.63% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
WMT is scheduled to report third-quarter fiscal 2024 earnings on Nov 16.
The Zacks Consensus Estimate for WMT’s to-be-reported quarter’s earnings and revenues is pegged at $1.50 per share and $159.1 billion, respectively. The stock has risen 20.1% in the past year.
The TJX Companies, Inc TJX has an Earnings ESP of +2.60% and a Zacks Rank #3 at present. TJX is set to post third-quarter fiscal 2024 results on Nov 15.
The Zacks Consensus Estimate for its to-be-reported quarter’s earnings and revenues is pegged at 97 cents per share and $13.05 billion, respectively. Shares of TJX have gained 24.9% in the past year.
Ross Stores, Inc ROST has an Earnings ESP of +2.08% and a Zacks Rank #2 at present. ROST is slated to release third-quarter 2023 results on Nov 16.
The Zacks Consensus Estimate for its to-be-reported quarter’s earnings and revenues is pegged at $1.21 per share and $4.83 billion, respectively. Shares of ROST have rallied 30.4% in the past year.
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