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Semiconductor Stocks Q1 Earnings Preview: SNDK, XLNX, TXN

As we approach the busiest week of the Q1 earnings cycle, the technology sector is expected to remain in the limelight. So far, the earnings scenario for the overall sector is pretty unimpressive. In fact, per the latest Zacks Earnings Trend report, earnings for the overall Technology sector will decline 5.8% year over year in the quarter.

This week, investors will be watching semiconductor stocks closely as a number of companies in this space are expected to come up with their quarterly results. The industry has been struggling since the last year as global economic headwinds, such as the slowdown in China and the strengthening dollar. Notably, the overall earnings of semiconductor industry witnessed year-over-year decline of 13.1% and 9.7% in 4Q15 and 3Q15, respectively.

Last week, a few major chip makers like Intel INTC and Advanced Micro Devices AMD released disappointing earnings results for the quarter.

This week, we hope to gain better visibility on where the semiconductor industry is heading as three leading companies in the space – SanDisk Corp. SNDK, Xilinx Inc. XLNX and Texas Instruments Inc. TXN – report their quarterly results on Apr 27.

SanDisk, which designs, manufactures, and markets flash memory storage products that are used in a wide variety of electronic systems, will report first-quarter 2016 results. For the first quarter, this Zacks Rank #3 (Hold) company has an Earnings ESP of 0.00%. The Zacks Consensus Estimate is pegged at 43 cents.

Last quarter, the company posted a positive earnings surprise of 43.84%. Moreover, Sandisk has surpassed the Zacks Consensus Estimate in three of the four preceding quarters, with an average positive surprise of 63.59%.

The company’s strategic acquisitions of Fusion-io Inc and SMART Storage Systems are expected to expand its offerings in the Enterprise SSD segment and boost first-quarter revenues. Moreover, during the first quarter, the company announced the availability of two new products – SanDisk Extreme 510 Portable SSD and SanDisk X400 SSD – at the International Consumer Electronics Show 2016. The products are aimed at advancing innovation in memory technologies, which, in turn, will strengthen the company’s product portfolio and have a positive impact on the first-quarter results. (Read more: SanDisk Q1 Earnings: Can the Stock Surprise Again?)

California-based chipmaker, Xilinx is set to report its fourth-quarter fiscal 2016 results. For the quarter, the company has an Earnings ESP of 0.00% and it carries a Zacks Rank #3. The Zacks Consensus Estimate stands at 52 cents.

Last quarter, the company posted in-line earnings. Notably, Xilinx has exceeded the Zacks Consensus Estimate in three of the four trailing quarters, with an average positive surprise of 6.03%.

Increasing demand for 28-nm nodes, driven by higher wireless deployments and strength in the wired communication segment, should remain the growth drivers. The company’s product launches are also expected to boost revenues. However, a delay in China LTE deployments, and higher spending on selling, general and administrative activities could dent the company’s near-term results. (Read more: Xilinx Q4 Earnings: Is the Stock Likely to Disappoint?)

Global semiconductor company, Texas Instruments will report its first-quarter 2016 results. For the quarter, this Zacks Rank #3 company has an Earnings ESP of 0.00%. The Zacks Consensus Estimate for the quarter is pegged at 62 cents.

Texas Instruments continues to prudently invest its R&D dollars in several high-margin, high-growth areas of the analog and embedded processing markets. This is gradually increasing its exposure to the industrial and automotive markets as well as dollar content at customers, while reducing its exposure to the volatile consumer/computing markets. However, citing lackluster demand for personal electronics, particularly PCs, and communications equipment, the company has been expecting weak top-line performance in the to-be-reported quarter. (Read more: Texas Instruments Q1 Earnings: What Lies in Store?)

Stay tuned! Check later on our full write-up on earnings releases of these stocks.

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ADV MICRO DEV (AMD): Free Stock Analysis Report
 
INTEL CORP (INTC): Free Stock Analysis Report
 
TEXAS INSTRS (TXN): Free Stock Analysis Report
 
SANDISK CORP (SNDK): Free Stock Analysis Report
 
XILINX INC (XLNX): Free Stock Analysis Report
 
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