DTS Inc. DTSI is set to release second-quarter earnings on Aug 10, following the closing bell.
Last quarter, the company delivered an earnings surprise of 23.08%. The company has delivered positive earnings surprise in only one of the last four quarters, but its average beat stands at 756.47%. Let’s see how things are shaping up for this announcement.
Factors to Consider
We believe that DTS will continue to gain market share backed by its strong product portfolio, increasing online availability and accelerated expansion of DTS technology into new markets, such as smartphones, portable devices, digital media players and network-connected TV space. Moreover, DTS continues to invest in the network connected business, which will help it to gain significant market share.
However, the ongoing volatile macroeconomic environment, weakness in the consumer electronics market and sluggish consumer spending are near-term headwinds. Moreover, higher costs are likely to hurt profitability in the near term.
Further, the company faces significant competition from Dolby Laboratories Inc. DLB and Sony Corp. SNE, which may hurt profitability.
Earnings Whispers?
Our proven model does not conclusively show that DTS is likely to beat the Zacks Consensus Estimate this quarter. This 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: DTS has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 22 cents per share.
Zacks Rank: Though DTS’ Zacks Rank #3 (Hold) increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Stock to Consider
Here is a company which you may consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter:
Amtech Systems Inc. ASYS, with an Earnings ESP of +8.00% and a Zacks Rank #3.
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