Amkor Technology, Inc. AMKR is set to report first-quarter 2015 results on Apr 27. Last quarter, it posted a 192.31% positive surprise. Let’s see how things are shaping up for this announcement.
Factors at Play
Amkor Technology delivered strong fiscal fourth quarter 2014 results with both the top and bottom lines beating the Zacks Consensus Estimate. The results were driven by strong growth in mobile communications using the company’s highly developed packaging and test technologies. Moreover, the strategic initiatives undertaken by the company led to higher sales and profitability.
The company introduced new technologies in its business, including a MEMS fusion product, which packages together multiple sensors into a single package and a memory module, combining NAND flash and low-power DRAM. Its Automotive business also witnessed growth.
The company’s efforts to broaden and deepen its cooperation with J-Devices, joint venture in Japan, on many fronts, including sales, operations and R&D, are expected to reap benefits in the to-be reported quarter.
Settlement of the lawsuit with Business Logic is also an added benefit as management can focus on growth without any risk, disturbance and litigation.
For the first quarter, Amkor expects revenues of $715 million to $765 million, down 10% to 16% from the prior quarter, gross margin of 16% to 19% and net income of $10 million to $34 million, or 4 cents to 14 cents per share
Earnings Whispers?
Our proven model does not conclusively show that Amkor 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 10 cents. Therefore, the ESP for the stock is 0.00%.
Zacks Rank: Amkor holds a Zacks Rank #2 (Buy) which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:
- Angie's List, Inc. ANGI, with Earnings ESP of +11.11% and a Zacks Rank #1 (Strong Buy)
- Broadcom Corp. BRCM, with Earnings ESP of +1.35% and a Zacks Rank #1
- InvenSense, Inc. INVN, with Earnings ESP of +25.00% and a Zacks Rank #1
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