Factors to Note Ahead of Dolby's (DLB) Q1 Earnings Release
Dolby Laboratories Inc DLB is slated to report first-quarter fiscal 2023 results on Feb 2.
The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $306.5 million, which suggests a decline of 12.8% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at 79 cents per share, indicating a year-over-year decrease of 21.8%.
For the first quarter of fiscal 2023, the company expects GAAP earnings of 46-61 cents per share and non-GAAP earnings of 76-91 cents per share on revenues of $300-$330 million.
Dolby Laboratories Price and EPS Surprise
Dolby Laboratories price-eps-surprise | Dolby Laboratories Quote
Factors to Note
The ongoing demand for the company’s Dolby Atmos and Dolby Vision, new licenses and imaging patents is likely to have helped the company's first-quarter performance. The company has built an ecosystem of content around Dolby Vision and Dolby Atmos, leading to broad adoption by content services amid growth in living room devices such as TVs, set-top boxes, sound bars, etc. This bodes well for top-line growth. Additionally, strong growth in Dolby Cinema as the box office improves from pandemic lows is a major tailwind.
Also, the company’s initiatives to boost growth in newer areas like music, automotive and user-generated content with the help of Dolby Vision Capture bodes well. In the last-reported quarter, Xiaomi introduced the first android phone with Dolby Vision Capture in China.
Dolby is also expanding its reach in the automotive market, with more than a dozen auto partners added in the past year. The recent addition of Polestar and Lotus at the Paris Auto Show Dolby Atmos are major tailwinds.
The company is likely to benefit from the adoption of Dolby.io, which is a platform that enables developers to build immersive online experiences. The growing demand for high-quality with ultra-low latency applications is further tailwinds.
However, the company expects declines in consumer device shipments going ahead due to macroeconomic weakness, supply chain troubles and inflation along with geopolitical instability. As a result, the audio segment is expected to decline by mid-single digits during the year.
What Our Model Says
Our proven model does not predict an earnings beat for DLB 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 -1.27% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are some stocks you may consider, as our proven model shows that these too have the right mix of elements to beat estimates this time around.
AMETEK AME has an Earnings ESP of +0.68% and a Zacks Rank #3 at present. AMETEK is scheduled to release its fourth-quarter 2022 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AME to-be-reported quarter’s earnings and revenues is pegged at $1.47 per share and $1.58 billion, respectively. Shares of the company have gained 5.2% in the past year.
MSCI Inc MSCI has an Earnings ESP of +0.76% and currently has a Zacks Rank #2. MSCI is scheduled to report fourth-quarter 2022 earnings on Jan 31.
The Zacks Consensus Estimate for MSCI’s to-be-reported quarter’s earnings and revenues is pegged at $2.71 per share and $565.9 million, respectively. Shares of the company have lost 3% in the past year.
Super Micro Computer SMCI has an Earnings ESP of +6.78% and presently carries a Zacks Rank #2. SMCI is slated to release the second quarter of fiscal 2023 numbers on Jan 31.
The Zacks Consensus Estimate for SMCI’s to-be-reported quarter’s earnings and revenues is pegged at $2.95 per share and $1.77 billion, respectively. Shares of the company have gained 83.4% in the past year.
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