Factors to Note Ahead of Dolby's (DLB) Q1 Earnings Release
Dolby Laboratories Inc DLB is slated to report first-quarter fiscal 2024 results on Feb 1.
The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $310.9 million, indicating a decrease of 7.2% from the year-ago quarter’s reported figure. The consensus mark for earnings per share (EPS) is pegged at 89 cents, indicating a year-over-year decrease of 19.8%.
The company expects GAAP EPS of 44-59 cents and non-GAAP EPS of 80-95 cents on revenues of $300-$330 million for the fiscal first quarter.
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 been affected by lower shipments in broadcast and consumer electronics due to macroeconomic weakness. Rising research and development costs to fend off stiff competition continue to strain DLB’s margins.
Our estimate for broadcast and consumer electronics sales is pegged at $108.1 million and $41 million, indicating a decline of 7.9% and 25.6%, respectively, from the year-ago reported figure.
However, the company’s performance is likely to have benefited from the increasing adoption of Dolby Atmos, Dolby Vision, and new imaging patents. The company expects revenues from these businesses to grow by a high single digit in fiscal 2024.
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 quarter, the company signed an agreement with a Chinese car manufacturer — BYD — to launch a car with Dolby Atmos.
Apart from this, the increasing adoption of Dolby Atmos Music to broadcast high-quality content to Dolby-enabled devices is a major tailwind. The company is likely to have benefited 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.
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 #3 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
Apple AAPL has an Earnings ESP of +1.96% and carries a Zacks Rank #3 at present. Apple is scheduled to release first-quarter fiscal 2024 results on Feb 1. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Apple’s to-be-reported quarter’s earnings and revenues is pegged at $2.09 per share and $117.6 billion, respectively. Shares of AAPL have gained 32.9% in the past year.
Alphabet GOOGL has an Earnings ESP of +2.26% and a Zacks Rank #3 at present. Alphabet is scheduled to release fourth-quarter 2023 results on Jan 30.
The Zacks Consensus Estimate for Apple’s to-be-reported quarter’s earnings and revenues is pegged at $1.60 per share and $70.7 billion, respectively. Shares of GOOGL have gained 55.3% in the past year.
Expedia Group EXPE has an Earnings ESP of +4.79% and a Zacks Rank #3 at present. Expedia is scheduled to release its fourth-quarter 2023 results on Feb 8.
The Zacks Consensus Estimate for EXPE’s to-be-reported quarter’s earnings and revenues is pegged at $1.67 per share and $2.88 billion, respectively. Shares of EXPE have gained 34.7% in the past year.
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