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II-VI (IIVI) to Report Q1 Earnings: Is a Beat in Store?

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Zacks Equity Research
·4 min read
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II-VI Incorporated IIVI is slated to report first-quarter fiscal 2021 (ended September 2020) results on Nov 5, before market open.

The company delivered better-than-expected results in two of the last four quarters, while lagging estimates in one and meeting estimates in another. The company has a trailing four-quarter earnings surprise of 64.90%, on average. Notably, its reported earnings of $1.18 in the prior quarter surpassed the Zacks Consensus Estimate of 78 cents by 51.28%.

In the past three months, shares of the company have declined 11.8% compared with the industry’s growth of 5.4%.

Let us delve deeper.

Key Factors & Estimates for Q1

II-VI’s solid product offerings of optoelectronic and engineered materials devices, its innovative capabilities, exposure in various end markets (including aerospace & defense, optical communications, life sciences and others) and a solid customer base might have worked in its favor in first-quarter fiscal 2021. Also, its effective supply-chain, manufacturing capabilities are added advantages.

In addition to the above, synergistic gains from Finisar acquisition might also get reflected in first-quarter results. Also, a solid backlog of $1 billion at the end of the fourth quarter of fiscal 2020 and healthy demand are likely to have contributed to the company’s first-quarter performance.

Also, the pandemic-induced demand for video conferencing, content streaming, energy efficiency, work-from-home, smart power and others are likely to have boosted the company’s operations in the quarter.

On the flip side, the company experienced year-over-year surge in cost of goods sold and operating expenses in the fourth quarter of fiscal 2020. This trend, if continued, might have impacted results in the first quarter.

For the first quarter of fiscal 2021, the company anticipates revenues to be $700-$750 million and non-GAAP earnings to be 45-60 cents per share.

The Zacks Consensus Estimate for revenues in the first quarter is pegged at $729 million, suggesting a 114.4% surge from the year-ago quarter’s reported number and 2.3% decline from the last reported quarter.

The Zack Consensus Estimate for the company’s first-quarter earnings is pegged at 55 cents per share, which indicates a decline of 3.5% from the year-ago quarter’s reported figure and 53.4% from the previous quarter’s levels.

Earnings Whispers

Our proven model suggests an earnings beat for II-VI 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. The case with II-VI is shown below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: II-VI has an Earnings ESP of +2.38%, with the Most Accurate Estimate of 56 cents above the Zacks Consensus Estimate of 55 cents.

IIVI Incorporated Price, Consensus and EPS Surprise

IIVI Incorporated Price, Consensus and EPS Surprise
IIVI Incorporated Price, Consensus and EPS Surprise

IIVI Incorporated price-consensus-eps-surprise-chart | IIVI Incorporated Quote

Zacks Rank: The company currently sports a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies in the Zacks Industrial Products sector that you may want to consider as they also have the right combination of elements to post an earnings beat this season.

The Middleby Corporation MIDD currently has an Earnings ESP of +7.84% and is a Zacks #3 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nordson Corporation NDSN presently has an Earnings ESP of +1.96% and a Zacks Rank of 2.

Flowserve Corporation FLS currently has an Earnings ESP of +2.56% and a Zacks Rank #2.

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Flowserve Corporation (FLS) : Free Stock Analysis Report
IIVI Incorporated (IIVI) : Free Stock Analysis Report
Nordson Corporation (NDSN) : Free Stock Analysis Report
The Middleby Corporation (MIDD) : Free Stock Analysis Report
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