Slew Of Earnings Beat Fail To Cheer Semiconductor ETFs

After an astounding performance in October–December 2015 period, the technology sector lost its luster thanks to global headwinds and a spate of disappointing earnings reports. Total earnings for 89.5% of the sector’s total market capitalization that have reported so far are up just 0.1% on 2.3% revenue growth.

However, the beat ratios are impressive with 76.1% of the companies beating on earnings and 60.9% trumping revenue estimates. However, some of them issued a disappointing revenue outlook.

Let’s dig into the individual performances:

Semiconductor Earnings in Focus

Intel (INTC – Analyst Report), the world’s largest chipmaker, reported solid Q4 results surpassing our earnings estimates by 11 cents and revenue estimates by $0.1 billion. On a year-over-year basis, earnings per share were flat while revenues grew 1%. For Q1, Intel expects revenues in the range of $13.6–$14.6 billion – the midpoint of which was well below the Zacks Consensus Estimate of $13.76 billion at the time of the earnings release. For fiscal 2016, revenues are expected to grow in mid-to-high single digits (read: Intel Tops Q4; Shares Fall: Should You Buy Its ETFs?).
 
Texas Instruments (TXN – Analyst Report) topped our earnings estimate by a couple of cents but missed on revenues by $140 million. For the ongoing first quarter, the company expects revenues in the range of $2.85–$3.09 billion and earnings per share of 57–67 cents. The Zacks Consensus Estimate for the first quarter at the time of issuing the guidance was $3.13 billion for revenue and 64 cents for earnings.

First-quarter fiscal 2016 earnings at Qualcomm (QCOM – Analyst Report) came in at 85 cents per share, beating our estimate by 7 cents. Revenues of $5.77 billion were ahead of our estimate of $5.69 billion. The company guided revenues of $4.9–$5.7 billion and earnings per share of 77–87 cents for the second quarter of fiscal 2016. The Zacks Consensus Estimate for the fiscal second quarter at the time of issuing the guidance was $5.66 billion for revenue and 78 cents for earnings.