Premium scientific & technical instruments company, MKS Instruments, Inc. MKSI is scheduled to report third-quarter 2015 results after the market closes on Oct 21, 2015. Over the last four quarters, the company reported a positive average earnings surprise of 14.74%. Let’s see how things are shaping up prior to this announcement.
Factors to Influence Q3 Results
Given the tailwinds prevalent in the semiconductor market and strength of a sound operating model, MKS Instruments expects revenues within $195–$215 million and earnings within 50–64 cents per share in third-quarter 2015.
MKS Instruments operates in a highly competitive industry. We recognize that extensive growth opportunities in the advanced and semiconductor markets would further augment the number of new business entrants and hence, rivalry within the industry. Such increased contest enhances risks of market share loss for the company.
Moreover, in order to sustain its market share, MKS Instruments might be forced to invset heavily toward innovations that might again increase its expenses and weigh on its earnings in the to-be-reported quarter.
Moreover, being multinational in nature, MKS Instruments is exposed to several other market uncertainties. Political, economical, social and technological changes in foreign countries often adversely influence the company's affairs. For instance, an appreciating U.S. dollar might render the company’s products more expensive and hence less competitive in the foreign markets. On such an occasion, the company's revenues as well as earnings for third-quarter 2015 might be hurt.
Earnings Whispers
Our proven model does not conclusively state that MKS Instruments is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for an earnings beat. That is not the case here as we will see below.
Zacks ESP: MKS Instruments has a negative Earnings ESP of 7.27% in the current quarter, as the Most Accurate estimate of 51 cents stands below the Zacks Consensus Estimate of 55 cents.
Zacks Rank: MKS Instruments’ Zacks Rank #4 (Sell) decreases the predictive power of earnings ESP. This, when combined with a negative ESP, predicts an earnings miss.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
GigOptix, Inc. GIG, with an earnings ESP of +50.00% and a Zacks Rank #2.
Pandora Media, Inc. P, with an earnings ESP of +50.00% and a Zacks Rank #1.
Agilent Technologies Inc. A, earnings ESP of +2.13% and a Zacks Rank #3.
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