Emcore (EMKR) Reports Third Quarter Loss, Skip Revenue Estimates

Emcore (EMKR) came out with a quarterly loss of $0.17 per share compared to the Zacks Consensus Estimate of a loss of $0.13. For comparison, a year earlier earnings per share were $0.20. These numbers have been adjusted for one-off items.

This quarterly report showed an earnings surprise of -30.77%. A quarter ago, it was expected that this maker of components for communications equipment and solar panels would post earnings of $0.03 per share when it actually produced a loss of $0.02, delivering a surprise of -166.67%.

The company has failed to beat consensus EPS estimates over the last four quarters.

Emcore, which belongs to the Zacks Electronics – Manufacturing Machinery industry, posted revenues of $23.68 million for the quarter ended June 2022, missing the Zacks Consensus Estimate by 8.94%. For comparison, revenues from the previous year amounted to $42.66 million. The company has topped consensus revenue estimates twice over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Emcore shares have lost approximately 53.3% since the beginning of the year compared to the S&P 500’s decline of -13.1%.

What’s next for Emcore?

While Emcore has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for Emcore is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.15 on revenue of $29.1M for the coming quarter and -$0.11 on revenue of $130M for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Electronics – Manufacturing Machinery industry is currently in the bottom 42% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One more stock from the broader Zacks Computer and Technology sector, One Stop Systems, Inc. (OSS), has not yet released results for the quarter ending June 2022. Results are expected to be released on August 11.

The company is expected to post quarterly earnings of $0.05 per share in its upcoming report, representing a year-over-year change of +25%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

One Stop Systems, Inc. revenues are expected to be will amount to $17.3 million, an increase of 16% compared to the same quarter last year.

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