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What's in Store Ahead of Sonos (SONO) Q3 Earnings Release

·4-min read

Sonos Inc SONO is scheduled to report third-quarter fiscal 2022 results on Aug 10.

For the fiscal third quarter, the Zacks Consensus Estimate for revenues is pegged at $428.3 million, indicating a year-over-year increase of 13.1%.

The Zacks Consensus Estimate for quarterly earnings is pinned at 6 cents per share, suggesting a year-over-year decline of 77.9%.

The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 124.4 %.

In the last reported quarter, Sonos reported non-GAAP earnings of 26 cents per share in second-quarter fiscal 2022, down 16.1% on a year-over-year basis. Quarterly revenues rose 20.1% (up 22.8% on a constant-currency basis) year over year to $399.8 million.

Let’s see how things have shaped up for the upcoming announcement.

Sonos, Inc. Price and EPS Surprise

 

Sonos, Inc. Price and EPS Surprise
Sonos, Inc. Price and EPS Surprise

Sonos, Inc. price-eps-surprise | Sonos, Inc. Quote

 

Factors at Play

Sonos is expected to have benefited from a strong demand environment, especially for its higher-end products. Sonos has been focused on its three strategic initiatives — expanding its brand, boosting its offerings and driving operational excellence. This is likely to have favored the top line and margin expansion.

New product launches are likely to act as a tailwind. Beam Gen 2 was the first product launched in fiscal 2022, which is the latest generation of the industry-leading compact smart soundbar for TV, music, gaming and more. The new Beam features a redesigned and updated sound experience with greater depth and clarity, as well as Dolby Atmos support. In May 2022, Sonos announced Sonos Ray and three new colors for Sonos Roam. The company also rolled out Sonos Voice Control, which lets users command the Sonos system using only their voice.

Steady traction witnessed for new products such as Roam and Sonos Radio HD, as well as partnerships with companies like Audi and IKEA, are likely to have aided the company in the quarter under review.

In April 2022, the company also acquired Netherlands-based Mayht Holding BV for nearly $100 million in an all-cash deal. Mayht specializes in making ground-breaking audio transducers. Transducers are a device within the speaker that generates sound. Mayht has been working on advancing transducers technology to enable smaller and lighter form factors without impacting the quality, added Sonos.

However, weak global macroeconomic conditions,  lingering supply-chain and logistic issues and component shortages are expected to have dented margin expansion. Rising operating costs have been another headwind, reflecting increasing research and development and sales and marketing spending.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Sonos this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Sonos has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

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 this quarter:

Hyatt Hotels Corporation H has an Earnings ESP of +216.67% and a Zacks Rank #3 currently. Hyatt Hotels is scheduled to report earnings results on Aug 9. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hyatt Hotels’ to-be-reported quarter’s loss per share and revenues is pegged at 1 cent per share and $1.36 billion, respectively. Shares of Hyatt Hotels have soared 14.6% in the past year.

Dolby Laboratories DLB has an Earnings ESP of +5.00% and a Zacks Rank of 3. Dolby is set to announce quarterly figures on Aug 9.

The Zacks Consensus Estimate for Dolby’s to-be-reported quarter’s earnings and revenues is pegged at 60 cents per share and $295.2 million, respectively. Dolby surpassed earnings estimates in the preceding three out of four quarters, with the average surprise being 14.7%. Shares of DLB have lost 20% in the past year.

Keysight Technologies KEYS has an Earnings ESP of +1.23% and a Zacks Rank #2 currently. KEYS is slated to release quarterly numbers on Aug 17.

The Zacks Consensus Estimate for KEYS to-be-reported quarter’s earnings and revenues is pegged at $1.79 per share and $1.34 billion, respectively. Keysight surpassed earnings estimates all the preceding four quarters, with the average surprise being 8%. Shares of KEYS have gained 0.2% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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