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Wolfspeed (WOLF) to Report Q3 Earnings: What's in Store?

Wolfspeed WOLF is scheduled to report third-quarter fiscal 2023 results on Apr 26.

Wolfspeed’s third-quarter fiscal 2023 revenues are expected to be between $210 million and $230 million. Loss is anticipated to be in the range of 12-16 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $218.5 million, suggesting an increase of 16.2% from the year-ago quarter’s reported number.

The consensus mark for third-quarter fiscal 2023 loss is pegged at 15 cents per share. Wolfspeed incurred a loss of 12 cents per share in the year-ago quarter.

Wolfspeed beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average surprise being 33.9%.

Wolfspeed Price and EPS Surprise

Wolfspeed Price and EPS Surprise
Wolfspeed Price and EPS Surprise

Wolfspeed price-eps-surprise | Wolfspeed Quote

Factors to Note

Wolfspeed has been benefiting from a strong pipeline of design-ins across a wide range of applications, including automotive, industrial and energy end markets in the quarter under review.

Further, strong demand for merchant and captive materials is likely to have favored the company in the to-be-reported quarter.

Moreover, Wolfspeed’s top-line growth is expected to have benefited from strong power devices and material product lines.

The gross margin is expected to have improved due to continued improvements in power device and material product lines supply execution. Wolfspeed expects non-GAAP gross margin between 32% and 34%. The same was 33.6% in the year-ago quarter.

However, softness in RF products demand because of secular headwinds and a recession-related pullback in 5G demand are expected to have acted as headwinds for the company in the fiscal third quarter.

Wolfspeed expects fiscal third-quarter non-GAAP operating loss to be between $22 million and $30 million. WOLF reported an operating loss of $35.5 million in the year-ago quarter.

Further, rising supply chain constraints due to geopolitical tensions and higher inflationary costs are likely to have negatively impacted its overall performance in the to-be-reported quarter.

What Our Model Says

Per the Zacks model, 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.

Wolfspeed currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

American Airlines AAL has an Earnings ESP of +85.71% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Airlines shares have fallen 32.9% in the past year. AAL is set to report its first-quarter 2023 results on Apr 27.

CNO Financial Group CNO has an Earnings ESP of +5.65% and a Zacks Rank #1.

CNO Financial Group shares have declined 12% in the past year. CNO is set to report its first-quarter 2023 results on May 1.

Asbury Automotive Group ABG has an Earnings ESP of +1.39% and a Zacks Rank #1.

Asbury Automotive shares have gained 23.3% in the past year. ABG is set to report its first-quarter 2023 results on Apr 25.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Wolfspeed (WOLF) : Free Stock Analysis Report

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Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report

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