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Amtech to Report Q3 Earnings: What's in Store for the Stock?

Zacks Equity Research

Amtech Systems, Inc. ASYS is slated to release third-quarter fiscal 2019 results on Aug 8.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and matched it once, the average beat being 105.5%.

In the last reported quarter, revenues of $20.6 million missed the Zacks Consensus Estimate of $27 million and declined 36.4% year over year as well.

For the fiscal third quarter, Amtech anticipates revenues between $19 million and $21 million. The Zacks Consensus Estimate is currently pegged at $19 billion, indicating a plunge of 53.9% from the year-ago reported figure.

Further, the consensus mark for earnings of 2 cents implies a slump of 88.9% from the prior-year reported number.

Amtech Systems, Inc. Price and EPS Surprise

Amtech Systems, Inc. Price and EPS Surprise

Amtech Systems, Inc. price-eps-surprise | Amtech Systems, Inc. Quote

Factors to Impact Q3 Results

Amtech’s earnings performance is likely to benefit from the strength in the North American semiconductor market. The company’s focus on expanding SiC/LED capacity is also a positive.

Moreover, it expects to deliver a gain in sales during the June quarter from the divestiture of its SoLayTec business.

The company’s attention on new sales and marketing initiatives is expected to help it target customer wins. Increase in solar automation shipments is likely to boost Automation revenues, which increased 41% in the last reported quarter.

However, softness in the semiconductor equipment industry due to weakness in the China market, is likely to impact the company’s top line in the soon-to-be-reported quarter.

Moreover, since a substantial portion of the company’s revenues is denominated in Renminbis, decrease in the currency value with respect to the US dollar might push actual revenues below the anticipated figure this earnings season.

Notably, the losses from discontinued operations will only be reduced beginning the fiscal fourth quarter. Therefore, this too remains an overhang on profitability.

What Our Model Says

The proven Zacks model clearly shows that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has maximum chances of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Amtech currently carries a Zacks Rank #2, which increases the predictive power of ESP. However, its Earnings ESP of 0.00% in the combination makes surprise prediction difficult.

Stocks to Consider

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Clearway Energy, Inc. CWEN has an Earnings ESP of +15.00% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ciena Corporation CIEN has an Earnings ESP of +5.26% and a Zacks Rank of 2.

GTT Communications, Inc. GTT has an Earnings ESP of +144.44% and a Zacks Rank #3.

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