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Factors Setting the Tone for CyberOptics' (CYBE) Q1 Earnings

Zacks Equity Research
·4 min read

CyberOptics Corporation CYBE is set to report first-quarter 2020 results on Apr 23.

The company expects net sales in the range of $15-$16.5 million in the to-be-reported quarter. The mid-point of the guided range, $15.75 million, indicates 5% year over year growth compared to the year ago quarter’s figure of $15 million.

Q4 at a Glance

In fourth quarter 2019, the company reported revenues of $16.9 million, down 6.6% from the year-ago quarter’s reported figure but up 36% sequentially.

Earnings during the quarter were 2 cents per share, down 87.5% from the year-ago quarter’s reported quarter, and 60% sequentially.

Let’s see how things have shaped up prior to this announcement.

CyberOptics Corporation Price and EPS Surprise

CyberOptics Corporation Price and EPS Surprise
CyberOptics Corporation Price and EPS Surprise

CyberOptics Corporation price-eps-surprise | CyberOptics Corporation Quote


Factors to Consider

In first-quarter 2020, CyberOptics witnessed the first deal win for its new 3D MX3000 memory module inspection system from a large memory manufacturer. This is expected to have boosted the company’s revenues in the quarter to be reported.

Owing to robust demand for its semiconductor sensors, the company expects strong sales of semiconductor sensors in the first quarter. It reported a backlog of $1.5 million in the fourth quarter.

Increasing popularity of the company's products instill confidence in the stock. Notably, shares of have returned 8.6% in the year-to-date period, compared to the industry’s decline of 17.1%.

CyberOptics also expanded its semiconductor sensor portfolio with the launch of the In-Line Particle Sensor and WaferSense Auto Resistance Sensor in the fourth quarter. These new sensors have robust features like detection of particle contaminants in semiconductor process and equipment and resistance measurements of plating cell contacts in semiconductor electrochemical deposition applications.

These features are likely to have led its robust adoption in the to-be reported quarter, which in turn is expected to have boosted top-line growth.

Further, recovery in the surface mount technology (SMT) and semiconductor capital equipment markets is expected to have benefited the company’s performance in the to-be-reported quarter.

Moreover, growing momentum of SQ 3000 is likely to have continued in the first quarter. Notably, revenues from SQ 3000 witnessed 91% year-over-year growth in previous quarter.

However, the company has been facing sluggish demand for its legacy sensors and systems. Also, increasing investments in sales and marketing as well as R&D are expected to have kept margins under pressure in the first quarter.

Moreover, supply chain disruptions due to the global coronavirus outbreak are expected to be a headwind in the to-be reported quarter, as the company may not be able to meet the demand for sensors, which is likely to have led to a loss in revenue.

Zacks Rank & Other Stocks to Consider

CyberOptics currently sports a Zacks Rank #1 (Buy).

Some other top-ranked stocks in the broader technology sector are Avid Technology, Inc. AVID, Netlist, Inc. NLST and OSI Systems, Inc. OSIS, which sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Avid, Netlist and OSI are currently pegged at 20%, 15% and 18%, respectively.

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