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Factors Setting the Tone for Entegris' (ENTG) Q3 Earnings

Zacks Equity Research
·4-min read

Entegris, Inc. ENTG is slated to report third-quarter 2020 results on Oct 22.

The company anticipates third-quarter non-GAAP earnings of 60-66 cents per share.

The Zacks Consensus Estimate for earnings per share has been steady at 63 cents in the past 30 days, which suggests an improvement of 26% from the year-ago reported figure.

Entegris expects third-quarter revenues of $450-$475 million. The Zacks Consensus Estimate for revenues is pegged at $463.1 million, which indicates an improvement of 17.5% from the year-ago quarter’s reported figure.

Entegris, Inc. Price and EPS Surprise

 

Entegris, Inc. Price and EPS Surprise
Entegris, Inc. Price and EPS Surprise

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

Notably, the company has a trailing four-quarter earnings surprise of 10.8%, on average.

Q2 At a Glance

In second-quarter 2020, the company reported revenues of $448.4 million, up 18% from the year-ago quarter’s reported figure and 8.7% sequentially.

Earnings during the quarter were 60 cents per share, up 53.8% from the year-ago quarter’s reported quarter and 9.1% sequentially.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Entegris’ third-quarter results are expected to reflect continued strength in the semiconductor industry amid the COVID-19 crisis.

The rising need for data center, notebooks (due to the coronavirus-induced remote working and learning) and gaming (the user base expanded due to lockdowns and shelter-in-place guidelines) has been driving memory demand. This is likely to have contributed to Entegris’ top line in the third quarter.

In second-quarter earnings conference, management noted that it expects a steady demand for its next-generation materials and advanced filtration solutions as customers continue with node transitions to aid top-line through 2020.

Notably, the Zacks Consensus Estimate for third-quarter revenues for the Advanced Materials Handling (AMH) segment is pegged at $133 million, which indicates a year-over-year increase of 13.4%.

Moreover, the increasing adoption of the company’s 2 NMTorrento liquid filter and high-purity liquid containers is likely to have driven Entegris’ third-quarter performance. The increasing demand for its end-to-end contaminations solutions is expected to drive revenues for Microcontamination Control (“MC”) segment. The Zacks Consensus Estimate for third-quarter revenues for the MC segment is pegged at $184 million, which indicates year-over-year growth of 18%.

Further, the growing traction across advanced deposition materials and cleaning chemistries is anticipated to have driven revenues for the Specialty Chemicals and Engineered Materials (SCEM) segment. The Zacks Consensus Estimate for third-quarter revenues for the SCEM segment is pegged at $154 million, which indicates year-over-year growth of 20.5%.

In second-quarter earnings conference, management noted that it expects synergies from the Global Measurement Technologies (or GMTI) acquisition to be slightly accretive to the company’s bottom line in 2020, which bodes well.

Notably, Entegris acquired GMTI in July 2020 in a bid to expand its portfolio of yield enhancement offerings for the semiconductor industry. The buyout is expected to drive revenues of the company’s AMH division, which augurs well for the company.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Entegris 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. But that’s not the case here.

Entegris has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Avnet AVT has an Earnings ESP of +39.13% and it currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Corning Incorporated GLW has an Earnings ESP of +0.59% and it presently flaunts a Zacks Rank of 1.

Sirius XM Holdings SIRI has an Earnings ESP of +7.14% and a Zacks Rank of 2 at present.

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