Xilinx Inc. (XLNX) is set to report second-quarter fiscal 2015 results on Oct 16. Last quarter, the company posted a positive earnings surprise of 0.41%. Let us see how things are shaping up for this announcement.
Factors to Consider This Past Quarter
Xilinx reported better-than-expected first-quarter results. Higher sales of 40-nanometer (nm) and 65-nm technology helped it to post year-over-year increase in revenues. Also, higher revenues and favorable product mix aided margins.
The growing demand for 28-nm nodes driven by higher wireless deployments and strength in the wired communication segment are expected to remain the growth drivers. The company also expects a rebound in the Industrial, Aerospace & Defense sales. The company’s product launches are also expected to boost revenues.
Nonetheless, delay in China LTE deployments and higher spending on research and development, and selling, general and administrative segments could impact the company’s results in the near term. Also, stiff competition from Altera (ALTR) remains a headwind.
Earnings Whispers?
Our proven model does not conclusively show that Xilinx will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 55 cents. Hence, the difference is 0.00%.
Zacks Rank: Xilinx currently carries a Zacks Rank #4 (Sell).
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some other companies, which you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Apple Inc. (AAPL) has an Earnings ESP of +4.62% and a Zacks Rank #2 (Buy).
Facebook Inc. (FB) has an Earnings ESP of +9.38% and a Zacks Rank #2.
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