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Xilinx (XLNX) to Report Q2 Earnings: Stock Likely to Beat


Xilinx Inc. XLNX is set to report second-quarter fiscal 2017 results on Oct 19. Last quarter, the company posted a positive earnings surprise of 10.9%. Notably, the stock has surpassed the Zacks Consensus Estimate thrice in the four trailing quarters with an average positive surprise of approximately 4.8%. Let's see how things are shaping up for this announcement.

Zacks Model Indicates Likely Earnings Beat

Our proven model shows that Xilinx is likely to beat earnings estimates this quarter. This 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 this to happen. Xilinx’s Most Accurate estimate stands at 55 cents while the Zacks Consensus Estimate is pegged at 54 cents, resulting in an Earnings ESP of +1.85%. Thus, the combination of the company’s Zacks Rank #2 and positive ESP makes us reasonably confident of an earnings beat this quarter.

XILINX INC Price and EPS Surprise

XILINX INC Price and EPS Surprise | XILINX INC Quote

Factors to Consider

The California-based chipmaker, Xilinx designs and manufactures a broad range of high-performance, high-density programmable devices. Increasing demand for 28-nm, 20-nm and 16-nm nodes, driven by higher wireless deployments and strength in the wired communication segment, is expected to continue driving growth in the to-be-reported quarter.

Furthermore, we expect the company’s revenues from 28-nm products to increase throughout fiscal 2017, aided by steady demand in communications, and continued strong adoption in the Automotive, ISM, Test and Aerospace and Defense markets. Moreover, design wins from other sectors such as wired communication, data center and industrial will add to revenues. While the scramble for share at advanced nodes continues, strength at the legacy nodes offers near-term support to the business, in our opinion.

Additionally, we are optimistic about the company’s recent decision to tap the fast-growing cloud computing, embedded, industrial IoT, and 5G markets which is likely to boost its revenues.

Other Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Boyd Gaming Corporation BYD has an Earnings ESP of +20.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Seagate Technology Plc STX has an Earnings ESP of +3.37% and a Zacks Rank #2.

Proofpoint Inc. PFPT has an Earnings EPS of 7.32% and a Zacks Rank #3.

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