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What's in Store for Amkor Technology (AMKR) in Q2 Earnings?

Amkor Technology, Inc. AMKR will report second-quarter 2017 results on Jul 31. Last quarter, the company’s earnings surprise was a negative 33.33%.

Also, year to date, shares of Amkor Technology have underperformed the industry it belongs to. While the industry rallied 32.6%, the stock returned 4.8%.

Let us see how things are shaping up for this announcement.

Factors to Consider

Amkor recently completed the acquisition of Nanium. The company expects the deal to strengthen its foothold in the fast-growing market of wafer-level packaging. The company has been doing well with its wafer-level packaging strategy that is enabling it to operate high volume wafer based manufacturing lines in three countries and serve over 100 customers.

The company’s strong market position and customer relationships in China are driving its business. Chinese stimulus plans have fueled growth in the past and laws passed by the local government regarding food safety and environmental testing offer additional growth opportunities for Amkor. It is well positioned at leading players, which should help the company generate strong revenues going forward.

Though we remain concerned about weakness in the smartphone market, Amkor is well positioned in growing markets like industrial, auto, consumer, computing and networking. Its high revenues and strong cash flow generation are big positives.

The company guided well for the second quarter. It expects revenues in the range of $955–$1.035 billion, up 5% to 13% sequentially. Gross margin is expected within 16–20%. Earnings per share are expected within 36–52 cents on a GAAP basis.

Amkor Technology, Inc. Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Amkor will beat on 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. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 11 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Amkor carries a Zacks Rank #3, which increases the predictive power of ESP. But the company’s 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant Look

Here are some stocks that you may want to consider as our model shows these have the right combination of elements to deliver a positive earnings surprise:

Symantec Corporation SYMC, with an Earnings ESP of +16.67% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arrow Electronics, Inc. ARW, with an Earnings ESP of +0.57% and a Zacks Rank #2.

The Priceline Group Inc. PCLN, with an Earnings ESP of +2.31% and a Zacks Rank #3.

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The Priceline Group Inc. (PCLN): Free Stock Analysis Report
 
Symantec Corporation (SYMC): Free Stock Analysis Report
 
Amkor Technology, Inc. (AMKR): Free Stock Analysis Report
 
Arrow Electronics, Inc. (ARW): Free Stock Analysis Report
 
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