For Immediate Release
Chicago, IL – February 4, 2018 – Zacks Equity Research Xilinx, Inc. XLNX as the Bull of the Day, Signet Jewelers Ltd. SIG as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alphabet Inc. GOOGL, The Walt Disney Company DIS and Twitter, Inc. TWTR.
Here is a synopsis of all five stocks:
Bull of the Day:
Based in San Jose, CA, Xilinx, Inc. is a semiconductor company that designs and develops programmable devices and associated technologies for cloud and wireless communications applications. Xilinx is known for inventing the field-programmable gate array (FPGA) device, and it also created the first fabless manufacturing model.
XLNX Rallies on Q3 Earnings Beat
Xilinx reported third-quarter results that beat analyst expectations and shares popped 18% as a result.
Earnings of 92 cents came in well above the Zacks Consensus Estimate of 85 cents per share.
Revenues surged 34% year-over-year to $800 million, also beating our consensus estimate thanks to strength across the company’s Wireless Communications, Aerospace and Defense, and Test and Emulation markets.
In particular, Xilinx’s Wireless segment is benefitting from early 5G production, pre-5G deployments and LTE upgrades.
Advanced product revenues jumped 51% year-over-year, contributing 66% to total revenues.
Xilinx also saw year-over-year growth across all four regions: North America and Europe grew 24% each while Asia Pacific and Japan grew 47% and 26%, respectively.
President and CEO Victor Peng said in the earnings release that “Based on the guidance we are providing for the fiscal fourth quarter, we expect to exceed $3 billion in annual revenues for the first time in our history…We continue to execute to our strategy and drive growth across our portfolio.”
Bear of the Day:
Signet Jewelers Ltd.is the world’s largest diamond jewelry retailer, and operates under the brand names Kay Jewelers, Zales, and Jared The Galleria of Jewelry, among others. The company has over 3,500 stores primarily in the U.S., the U.K., Ireland, and the Channel Islands.
In the past six months, shares of Signet have fallen nearly 60%. Disappointing holiday sales and a cut to its Q4 and fiscal 2019 guidance hurt the stock, especially after a brutal 40% decline in December, and investors have dumped their positions.
Weak Holiday Sales
Last December saw the company report mixed results. Signet reported an adjusted loss of $1.06 per share, which was narrower than the Zacks Consensus Estimate of a loss of $1.08. Revenues also beat our consensus estimate and same-store sales rose 1.6% year-over-year.
But, the big year-over-year bottom line decline coupled with lowered full-year guidance left the market and investors underwhelmed.
On top of this report came weaker-than-expected holiday sales a few weeks ago. Total sales for the nine-week period fell 2.5% and same-store sales decreased 1.3%; sales in its North America and International segments fell as well, down 2.1% and 11.7%, respectively.
As a result, guidance for the current year and quarter was trimmed even more.
Signet now expects same-store sales to be flat compared to previous guidance of flat to up 1%. Adjusted earnings are projected to fall in the range of $3.53-$3.69 per share compared to $4.15-$4.40 per share. Total sales will now be between $6.24 billion to $6.26 billion compared to $6.26 billion to $6.31 billion.
CEO Virginia Drosos commented “…the competitive promotional environment we saw early in the season intensified in December and, despite our increased promotional investments, we experienced reduced traffic during key December gifting weeks. Combined with higher than expected credit costs, these factors negatively impacted our profitability.”
Upcoming Earnings Reports to Watch: GOOGL, DIS, TWTR
It was another good week for stocks, as Wall Street celebrated trade talks and a newly dovish Fed by sending indexes higher once again. The positive trading was also delivered amid a packed stretch of Q4 earnings reports, which largely impressed.
So far this earnings season, companies have broadly surpassed expectations, as estimates that moved lower during late 2018’s uncertainty proved easier to beat. This trend is evidenced by the likes of Apple, which outperformed estimates that were lowered after its rare profit warning, and Facebook, a company that many expected to underperform amid rising expenses.
But whether or not this earnings momentum will continue remains to be seen. There are plenty of bellwether companies yet to report, and the true impact of earnings season is often not realized until several weeks after the fact.
In this important period, investors should remember to use the Zacks Earnings Calendar to plan out their schedules for earnings, dividend announcements, and other important financial releases. This handy tool is your perfect one-stop-shop to properly prepare for the market events that will have an impact on your own portfolio.
Today, we’re going to take a look at a few of the upcoming week’s most important reports. This is an incomplete list, no doubt. The companies below, in our view, simply carry the heaviest narratives into their reports, and they should serve as great indicators for their broader industries.
Check out our top earnings reports to watch for the week of February 4:
1. Alphabet Inc.
Google parent Alphabet will report after the market closes on Monday. Shares of the internet pioneer are up about 7% in the past month, and its consensus earnings estimate has gained over the last 60 days. However, the most recent analyst estimates have been lower, raising questions about Google’s latest profit trends.
Analysts expect Alphabet to report earnings of $11.08 per share and adjusted revenue of $31.3 billion, according to our Zacks Consensus Estimates. These results would represent year-over-year growth rates of 14% and 21%, respectively. Alphabet’s Most Accurate Estimate—a more recent version of the Zacks Consensus EPS estimate—sits two pennies below the consensus. Recent estimates are typically more reliable than older estimates. Still, GOOGL has missed our consensus just twice in the trailing eight quarters.
2. The Walt Disney Company
Media and entertainment behemoth Disney is scheduled to report after the closing bell on Tuesday. Disney shares have added just over 2% in the past month. Earnings estimates for the to-be-reported quarter have fallen. Analysts have also revised their full-year EPS estimates for Disney to the downside recently.
Our latest Zacks Consensus figures are now calling for Disney to post quarterly earnings of $1.57 per share and revenue of $15.2 billion. These figures would mark year-over-year declines of 17% and 1%, respectively. Guidance will be important as Disney approaches the release of its over-the-top streaming service. Right now, earnings are expected to be down 1% on revenue growth of 2% for the fiscal year ending in September.
3. Twitter, Inc.
Social media giant Twitter is scheduled to announce its latest quarterly results before the market opens on February 7. Twitters shares are up about 17% in the last month. Earnings estimates have ticked lower recently, although the consensus is now back to where it was as recently as 90 days ago.
The most updated consensus estimates for Twitter’s report sit at $0.25 in earnings per share and revenue of $871.6 million. These results would represent year-over-year growth rates of 32% and 19%, respectively.
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