Synaptics Inc. SYNA is set to report second-quarter fiscal 2017 results on Jan 26. Last quarter, the company posted a negative earnings surprise of 8.82%. In the trailing four quarters, the company has posted a positive average earnings surprise of 33.27%.
Moreover, in the past year Synaptics’ shares have generated a negative return of 21.51% compared with the Zacks Electronics Semi-conductors Industry’s gain of 77.91%.
Let’s see how things are shaping up for this quarter.
Factors to Consider
Synaptics is primarily engaged in developing human interface solutions for a wide array of mobile computing and communications devices and is one of the leading suppliers of TouchPads to the notebook computer market. The company’s clientele includes Apple Inc. AAPL, Xiaomi, Samsung, Huawei and Lenovo among others.
The company remains focused on enhancing its Automotive Solutions and Touch and Display Driver Integration (TDDI) and fingerprint portfolio. We expect the company to continue gaining from improved margins of each of its product lines. Moreover, strong shareholder repurchase plan will continue to cushion the company’s earnings.
Its partnership with Huawei has greatly expanded its offerings. However, intensifying competition and ongoing troubles with the flagship smartphones of Apple and Samsung especially in China can prove to be a headwind for the company as it derives a significant portion of its revenues from these companies.
For second-quarter 2017, the company expects revenues in a range of $430 million to $470 million. Non-GAAP earnings are expected to be in the $1.20 to $1.50 per share bracket.
Synaptics Inc. Price and EPS Surprise
Synaptics Inc. Price and EPS Surprise | Synaptics Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that Synaptics is likely to beat earnings 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. This is not the case here as you will see below.
Zacks ESP: Synaptics currently has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 98 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Synaptics has a Zacks Rank #5 (Strong Sell). We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.