In or Out Ahead of Earnings: Previewing ARM Holdings, Flextronics, and More (ARMH, MIPS, FLEX, RFMD, NOK, STM, ISIL)
Earnings season is well underway in the tech sector. What should investors expect from these reports? What are the key storylines to follow and are these stocks likely to trade higher or lower in the wake of their results?
In NextInning.com’s earnings previews, available free to trial subscribers, key storylines are evaluated, analyst expectations are audited, and in depth valuation analyses are provided to develop fair value ranges for dozens of stocks.
Some of the stocks covered include:
ARM Holdings (ARMH) – “In the beginning of the digital cell phone era, the initial processing need was mostly to support simple baseband processor applications. As feature phones entered the market, they needed simple applications processors. Both applications were perfectly suited for ARM processors. From feature phones sprang the early smartphones, which were also well suited for ARM processors. However, now that smartphones are getting even smarter, and are on a trajectory to more closely resemble what we’re used to getting in basic netbook PCs, they need more processing power. Those devices can finally leverage the benefits of the multi-thread technology that MIPS Technologies (MIPS) has delivered for years to its traditional markets.”
Flextronics International (FLEX) – “The primary weight on Flextronics shares this year has been because the company carries a leveraged balance sheet and the markets have turned risk-averse since mid-February. That said, as I wrote in 2008 when the price of FLEX crashed to nearly $1, I believe Wall Street is dead wrong here in applying such a substantial risk discount to Flextronics.”
RF Micro Devices (RFMD) – “In January I outlined two things that could negatively impact RF Micro. One was the change-over at Nokia (NOK) to new designs that won’t use transceivers from RF Micro, and the second was the migration from 2G to 3G, and how well RF Micro has done in winning 3G designs at Nokia and with other customers. As it turned out, both negatives came into play.”
STMicroelectronics NV (STM) – “Early in 2010 the current year earnings consensus from the covering analysts was only $0.25. While some readers then thought I was crazy to forecast $0.60, as it turned out, STMicro outperformed even my optimistic projection and when all was said and done, reported 2010 earnings of $0.74.”
Intersil (ISIL) – “Setting aside what I think was a clear mistake by Intersil’s board in deciding to rebuild the company’s business model versus simply selling the company, Intersil’s management made a huge strategic mistake by encouraging Wall Street to evaluate the company on a GAAP versus non-GAAP basis. About the last thing a company should want is a GAAP evaluation while it is rebuilding its business model through acquisitions.”
In its earnings previews for the week of April 25th, NextInning.com looks at several popular tech stocks set to report earnings, including ARM, Flextronics, RF Micro, STMicro, Intersil and more.
More on this topic (What's this?)
ARM Holding (ARMH) with Another Fine Quarter, but Range Bound for Now (Fund my Mutual Fund, 4/27/11)
(FLEX) Flextronics International Targets Emerging Markets (Stock Blog Hub, 6/9/11)
Tablet Glut Won’t Matter for ARM Holdings, Analyst Says (Wall Street Sector Selector, 3/11/11)
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