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Tech Stocks' Earnings Lineup for Jul 26: TWTR, YNDX, AVX

Aniruddha Ganguly

Technology stocks are anticipated to see a sluggish second-quarter 2019, primarily due to softness in the semiconductor space from declining memory prices (both DRAM and NAND) and lower demand from smartphone OEMs. Moreover, tariffs on electronics due to the U.S.-China trade war negatively impacted demand for chips.

Additionally, the suspension of shipments to Huawei due to the export ban imposed by the U.S. government hurt Xilinx’s XLNX top-line growth. The chip-maker provided a weaker-than-expected outlook for second-quarter fiscal 2020 due to the ban and other trade-related uncertainties.

However, robust earnings and better-than-expected guidance from Texas Instruments and Teradyne reflect improving demand for chips in the second half of 2019.

Microsoft, Facebook, Snap Beat Expectations

Microsoft MSFT reported blockbuster fourth-quarter fiscal 2019 earnings results, with Azure revenues surging 64% from the year-ago quarter.

Social-media giant Facebook FB also reported solid second-quarter 2019 results, with continued user base growth amid increasing regulatory concerns related to privacy issues and cryptocurrency, Libra.

Snapchat-parent Snap also witnessed a terrific second-quarter 2019, as loss narrowed on a year-over-year basis and daily active users grew 13 million sequentially.

Nevertheless, weakness in semiconductor remains a headwind. Further, weak server market growth due to lower demand from enterprise buyers and hyperscale companies, and sluggish China market are major concerns.

Let’s take a sneak peek into three technology companies that are set to report quarterly earnings on Jul 26:

San Francisco, CA-based Twitter TWTR is likely to benefit from its efforts to add features, which aim at improving user experience. Focus on making the platform more conversational must have helped the company expand the monetized user base in the second quarter. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

However, Twitter is unlikely to deliver a positive earnings surprise because it has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy).

According to the Zacks model, only a company with a Zacks Rank #1, 2 or 3 (Hold) has a good chance of beating estimates, if it also has a positive Earnings ESP. Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

The Zacks Consensus Estimate for earnings has been steady at 18 cents over the past 30 days. (Read More: Twitter to Report Q2 Earnings: What's in the Cards?)

Twitter, Inc. Price and EPS Surprise

Twitter, Inc. Price and EPS Surprise

Twitter, Inc. price-eps-surprise | Twitter, Inc. Quote


Meanwhile, Yandex’s YNDX second-quarter 2019 results are expected to benefit from increasing share in the Russian search market. The company’s solid momentum across Taxi, Classifieds and Experiments segments are expected to drive advertising revenues in the to-be-reported quarter.

However, this Sciphol, Netherlands-based company has an unfavorable combination of a Zacks Rank #1 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The consensus mark for second-quarter earnings has been steady at 26 cents over the past 30 days.

Yandex N.V. Price and EPS Surprise

Yandex N.V. Price and EPS Surprise

Yandex N.V. price-eps-surprise | Yandex N.V. Quote


Fountain Inn, SC-based AVX Corporation’s AVX first-quarter fiscal 2020 results are expected to be negatively impacted by continuous inventory build in the supply chain for commodity products along with weak consumer market in China.

Moreover, AVX has a Zacks Rank #5.  

Notably, the Zacks Consensus Estimate for first-quarter fiscal 2020 earnings has declined 9.1% to 30 cents over the past 30 days.

AVX Corporation Price and EPS Surprise

AVX Corporation Price and EPS Surprise

AVX Corporation price-eps-surprise | AVX Corporation Quote


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