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Shares of Microsemi Corporation climbed a new 52-week high of $40.52 on Aug 19, eventually closing at $40.10. The company returned 29.7% in the past one year and has added approximately 23.0% year to date. Average volume of shares traded over the last three months was roughly 948K.
What's Driving Microsemi Corporation?
Microsemi Corporation is an OEM of a broad range of high-reliability and analog/mixed signal integrated circuits. We believe that the company’s compelling products, scope for margin expansion, new design wins and solid execution will take it from strength to strength.
The price appreciation can be attributed to Microsemi’s strong fundamentals and better-than-expected fiscal third-quarter 2016 results reported on Jul 28. In response to strong earnings, the stock has gained 10.8%.
In the fiscal third quarter, Microsemi reported earnings of 62 cents, which beat the Zacks Consensus Estimate by 8 cents. Also, revenues of $431.4 million were above the Zacks Consensus Estimate and within the company’s guided range. The increase was attributed to an improvement in the company’s end markets. However, revenues were down 2.9% sequentially due to the divestitures in the quarter.
The company’s focus on improving product mix, operational efficiency and consolidation, will drive revenues and help it achieve a better gross margin in the second half of calendar 2016.
During the fiscal third quarter, the company also completed its divestiture of non-core businesses to refocus on core areas like Internet of Things and automotive markets. It completed the sale of its non-strategic business component of systems and packaging business to Mercury Systems. It also sold its Broadband Wireless Division, which was previously part of PMC-Sierra, Inc. to Max-Linear.
These initiatives will add to its expertise in timing and synchronization of production need to business profitability, weapons and contraband screening systems, power supply, and Ethernet and broadband infrastructure. Also, these divestitures free up capital for the development of higher-value ICs and system-on-chip (SoC) offerings, making the business model more profitable.
Additionally, Microsemi delivered an average positive earnings surprise of nearly 8.82% over the trailing four quarters. The company’s strong market position, its compelling product lines, strong revenue growth, continued innovation and strong long-term growth potential consolidate its market presence favorably.
The company is expected to report fiscal fourth-quarter 2016 results on Nov 3.
Microsemi expects fourth-quarter fiscal 2016 revenues of $438–$458 million. The Zacks Consensus Estimate of $445 million is within the guided range. Non-GAAP earnings per share are likely to be within 83–97 cents, above our estimate of 66 cents.
Microsemi Corporation currently has a Zacks Rank #3 (Hold).
Some well-placed stocks in the same space are Silicon Laboratories Inc. (SLAB - Free Report) , sporting a Zacks Rank #1 (Strong Buy), while Intel Corp. (INTC - Free Report) and Inphi Corp. , each, are sporting a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
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Microsemi (MSCC) Scales New 52-Week High
Shares of Microsemi Corporation climbed a new 52-week high of $40.52 on Aug 19, eventually closing at $40.10. The company returned 29.7% in the past one year and has added approximately 23.0% year to date. Average volume of shares traded over the last three months was roughly 948K.
What's Driving Microsemi Corporation?
Microsemi Corporation is an OEM of a broad range of high-reliability and analog/mixed signal integrated circuits. We believe that the company’s compelling products, scope for margin expansion, new design wins and solid execution will take it from strength to strength.
The price appreciation can be attributed to Microsemi’s strong fundamentals and better-than-expected fiscal third-quarter 2016 results reported on Jul 28. In response to strong earnings, the stock has gained 10.8%.
In the fiscal third quarter, Microsemi reported earnings of 62 cents, which beat the Zacks Consensus Estimate by 8 cents. Also, revenues of $431.4 million were above the Zacks Consensus Estimate and within the company’s guided range. The increase was attributed to an improvement in the company’s end markets. However, revenues were down 2.9% sequentially due to the divestitures in the quarter.
The company’s focus on improving product mix, operational efficiency and consolidation, will drive revenues and help it achieve a better gross margin in the second half of calendar 2016.
During the fiscal third quarter, the company also completed its divestiture of non-core businesses to refocus on core areas like Internet of Things and automotive markets. It completed the sale of its non-strategic business component of systems and packaging business to Mercury Systems. It also sold its Broadband Wireless Division, which was previously part of PMC-Sierra, Inc. to Max-Linear.
These initiatives will add to its expertise in timing and synchronization of production need to business profitability, weapons and contraband screening systems, power supply, and Ethernet and broadband infrastructure. Also, these divestitures free up capital for the development of higher-value ICs and system-on-chip (SoC) offerings, making the business model more profitable.
Additionally, Microsemi delivered an average positive earnings surprise of nearly 8.82% over the trailing four quarters. The company’s strong market position, its compelling product lines, strong revenue growth, continued innovation and strong long-term growth potential consolidate its market presence favorably.
The company is expected to report fiscal fourth-quarter 2016 results on Nov 3.
Microsemi expects fourth-quarter fiscal 2016 revenues of $438–$458 million. The Zacks Consensus Estimate of $445 million is within the guided range. Non-GAAP earnings per share are likely to be within 83–97 cents, above our estimate of 66 cents.
Microsemi Corporation currently has a Zacks Rank #3 (Hold).
MICROSEMI CORP Price and Consensus
MICROSEMI CORP Price and Consensus | MICROSEMI CORP Quote
Stocks to Consider
Some well-placed stocks in the same space are Silicon Laboratories Inc. (SLAB - Free Report) , sporting a Zacks Rank #1 (Strong Buy), while Intel Corp. (INTC - Free Report) and Inphi Corp. , each, are sporting a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>