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MagnaChip (MX) to Post Q1 Earnings: What's in the Offing?

Zacks Equity Research
·3 mins read

MagnaChip Semiconductor MX is set to report first-quarter 2020 results on May 6.

For the quarter, the company anticipates revenues of $187-$197 million. The Zacks Consensus Estimate for revenues is pegged at $192 million, implying growth of 22% from the figure reported in the year-ago quarter.

The Zacks Consensus Estimate is pegged at 15 cents per share, indicating an increase of 125.86% from the figure reported in the year-ago quarter.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and matched in the remaining one, the average positive surprise being 82.59%.

Let’s see how things are shaping up for the upcoming announcement.

MagnaChip Semiconductor Corporation Price and EPS Surprise

MagnaChip Semiconductor Corporation Price and EPS Surprise
MagnaChip Semiconductor Corporation Price and EPS Surprise

MagnaChip Semiconductor Corporation price-eps-surprise | MagnaChip Semiconductor Corporation Quote

Factors at Play

MagnaChip’s first-quarter 2020 is expected to have benefited from stronger-than-expected chip demand. Notably, the lockdown situation has spurred significant chip demand from PC manufacturers and data-center operators. In its last earnings call, the company had expected lower demand for its products due to disruptions stemming from the coronavirus outbreak. It had projected first-quarter revenues between $180 million and $195 million. However, in March, MagnaChip raised its guidance to $187-197 million, which was encouraging.

Moreover, MagnaChip’s manufacturing supply chain is largely based outside China, which means that the pandemic is not likely to have caused any supply-chain disruptions.

The company is also likely to have witnessed a solid OLED business with a strong pipeline of products. The company mentioned in its earlier earnings call that they expect to gain share in the market for OLED display driver suppliers.

Nonetheless, the impact of coronavirus has led to a deteriorating global economic outlook, which is expected to have affected demand in various end markets such as mobile, consumer, automotive and industrial products.

What Our Model Says

The proven Zacks model does not conclusively predict an earnings beat for MagnaChip 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 beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MagnaChip has an Earnings ESP of 0.00% and a Zacks Rank #1.

Stocks to Consider

Here are a few stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season:

AMETEK, Inc. AME has an Earnings ESP of +0.20% and a Zacks Rank #3.

Dynatrace, Inc. DT has an Earnings ESP of +2.13% and a Zacks Rank #3.

Arista Networks, Inc. ANET has an Earnings ESP of +0.18% and a Zacks Rank of 3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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AMETEK, Inc. (AME) : Free Stock Analysis Report
 
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Arista Networks, Inc. (ANET) : Free Stock Analysis Report
 
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