Semiconductor Stocks' Earnings Due On Jul 31: IDTI, AMKR

The second-quarter reporting cycle is in full swing. As of Jul 26, 2017, 171 S&P 500 members, accounting for 44.1% of the index’s total market capitalization, reported results, according to Earnings Preview.

Total earnings for these 171 index members were up 8.8% from the year-ago quarter on a 3.4% improvement in revenues. The beat ratio for earnings and revenues were 78.9% and 70.8%, respectively.

The earnings momentum is expected to continue through the season. Per the report, total earnings for S&P 500 companies in the second quarter are expected to grow 8.7% year over year on 4.7% higher revenues. This follows 13.3% earnings growth in the first quarter on 7% increase in revenues, the highest in almost two years.

A few semiconductor companies are slated toreport their earnings on Jul 31. The industry serves as a driver, enabler and indicator of technological progress. So, let’s take a sneak peek at how Integrated Device Technology, Inc. IDTI and Amkor Technology, Inc. AMKR are placed ahead of their releases.

Integrated Device is unlikely to beat fiscal first-quarter 2018 expectations as it has an unfavorable combination of a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

This is because, as per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 to beat earnings. (You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Notably, Integrated Device delivered a positive earnings surprise of 7.41% in the last quarter. Also, the company outperformed the Zacks Consensus Estimate thrice in the last four quarters, with an average positive surprise of 6.55%.

Integrated Device products continue to gain traction in the computing, communications and automotive markets. However, increasing competition is a significant headwind that will weigh on share price in 2017.

Integrated Device’s shares have returned only 10.0% year to date, underperforming the industry’s gain of 2.4%.

Similarly, Amkor Technology Inc. looks unlikely to beat second-quarter fiscal 2017 estimates as it has an unfavorable combination of a Zacks Rank #3 and an Earnings ESP of 0.00%.

Notably, Amkor Technology’s surprise history has been decent. The company beat estimates in three of the trailing four quarters and missed once. It delivered an average positive surprise of 43.06% during that time frame.Read more: What's in Store for Amkor Technology in Q2 Earnings?)

Amkor Technology’s shares have returned only 2.5% year to date, underperforming the industry’s gain of 32.4%.

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