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Will Lower Revenues Mar Turtle Beach (HEAR) Q3 Earnings?

Zacks Equity Research

Turtle Beach Corporation HEAR is scheduled to report third-quarter 2019 results after the closing bell on Nov 7.

In the last reported quarter, the company delivered a positive earnings surprise of 66.7%.

It is likely to have generated lower consolidated revenues on a year-over-year basis in the third quarter, owing to the prolonged tariff war and stiff competition from low-priced competitors.

Factors at Play

During the third quarter, Turtle Beach unveiled the Elite Atlas Aero Wireless High-Performance PC Headset with immersive Waves Nx audio technology. Also, it introduced the Kain series of gaming mice with an innovative click-mechanism that registers the click signal up to 16 milliseconds faster than other available variants. Moreover, Turtle Beach launched the Elite Atlas Aero with premium sound technology and 30-hour rechargeable for full panoramic 3D audio experience.

Despite such innovative products, tariff war with China, which is one of the most important markets of the company, is likely to have harmed its supply chain management and strained margins. In addition, fierce competition from low-cost rival chipmakers is likely to have affected revenues of the company.

Key Projections

The Zacks Consensus Estimate for total revenues for the third quarter is pegged at $43 million, indicating a 41.9% decline from the year-ago reported number. The consensus estimate for earnings is currently pegged at a loss of 29 cents per share. The company reported earnings of 91 cents in the year-ago quarter.

Earnings Whispers

Our proven model does not predict an earnings beat for Turtle Beach this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Turtle Beach Corporation Price and EPS Surprise

 

Turtle Beach Corporation Price and EPS Surprise

Turtle Beach Corporation price-eps-surprise | Turtle Beach Corporation Quote

Zacks Rank: Turtle Beach has a Zacks Rank #3.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:

Hewlett Packard Enterprise Company HPE is set to release quarterly numbers on Dec 3. It has an Earnings ESP of +8.70% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Ubiquiti Inc. UI is +1.18% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Nov 8.

The Earnings ESP for Comtech Telecommunications Corp. CMTL is +7.14% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Dec 5.

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