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Silicon Motion (SIMO) Beats Q3 Earnings Estimates, Shares Up
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Silicon Motion Technology Corporation (SIMO - Free Report) delivered third-quarter 2018 non-GAAP earnings of 95 cents per American Depositary Share ("ADS"), which surpassed the Zacks Consensus Estimate of 88 cents. It also came ahead of the year-ago quarter figure of 57 cents and increased 3.3% sequentially.
Net sales rose 9% year over year and were almost flat from the previous quarter to $138.6 million. The figure outpaced the Zacks Consensus Estimate of $138 million marginally. Moreover, the figure was within management’s guided range of $136 to $142.9 million.
We believe improving supply of 64-layer 3D NAND is bringing down high NAND prices, which is eventually benefiting Silicon Motion.
Additionally, Client SSD Controller sales are anticipated to increase following the company’s Open-Channel NVMe SSD controller entering into production.
Shares of the company rose more than 4% yesterday.
Sales from mobile storage products (which include Embedded Storage as well as Expandable Storage products) increased 11% year over year and flat sequentially to $129.8 million. Revenues from mobile storage products contributed 94% to overall product revenues.
Sales for Client SSD controllers grew 35% quarter over quarter. During the reported quarter, the company shipped SSD controllers based on QLC-based PCIe NVMe client SSDs to US NAND flash makers.
Revenues from eMMC and UFScontrollers increased 5% sequentially.
Embedded Storage sales (approximately 85% of total revenues) were stable quarter over quarter. Revenues from SSD solutions declined 40% sequentially.
Mobile communications product (which include mobile TV SoCs) sales were $7 million, representing 5% of total revenues. However, the figure declined 6.7% sequentially and 19.5% year over year.
Other products formed 1% of revenues and generated $1.7 million.
Operational Details
Non-GAAP gross margin expanded 350 basis points (bps) on a year-over-year basis and 500 bps sequentially to 51%.
Non-GAAP operating margin increased 710 bps on year-over-year basis and 140 bps sequentially to 27.1%. Non-GAAP operating expenses as a percentage of revenues decreased from 26% from the year ago quarter to 23.9%. On a sequential basis operating expensed increased 200 bps.
Liquidity & Cash Flow
Exiting the reported quarter, Silicon Motion’s cash, cash equivalent and short-term investments were $308.2 million, down from $364.2 million in the second quarter.
On Oct 24, 2017, its board of directors had declared an annual dividend of $1.20 per ADS. Quarterly instalments to be paid by the company were 30 cents per ADS. On Aug 22, 2018, the company paid $10.8 million to shareholders representing its fourth instalment.
Consequently, on Oct 26, 2018, the company’s Board of Directors had declared a new annual dividend of $1.20 per ADS. Quarterly instalments to be paid by the company were 30 cents per ADS. The company will be paying its first instalment on Nov 23, 2018.
Guidance
For fourth-quarter 2018, Silicon Motion expects non-GAAP revenues to be in the range of $120.5-$127.5 million. The Zacks Consensus Estimate for is currently pegged at $149.8 million.
Non-GAAP gross margin is anticipated within 50-52%. Non-GAAP operating margin is expected to lie in the range of 25% to 27%.
The company predicts lower than expected sales for full year 2018. However, margins are projected to be better than expected due to robust SSD controller sales.
Further, client SSD controllers are expected to show a growth rate of 35% for full year 2018.
NetApp, Intel and Upland Software have a long-term earnings growth rate of 14.1%, 8.4% and 20%, respectively.
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Image: Bigstock
Silicon Motion (SIMO) Beats Q3 Earnings Estimates, Shares Up
Silicon Motion Technology Corporation (SIMO - Free Report) delivered third-quarter 2018 non-GAAP earnings of 95 cents per American Depositary Share ("ADS"), which surpassed the Zacks Consensus Estimate of 88 cents. It also came ahead of the year-ago quarter figure of 57 cents and increased 3.3% sequentially.
Net sales rose 9% year over year and were almost flat from the previous quarter to $138.6 million. The figure outpaced the Zacks Consensus Estimate of $138 million marginally. Moreover, the figure was within management’s guided range of $136 to $142.9 million.
We believe improving supply of 64-layer 3D NAND is bringing down high NAND prices, which is eventually benefiting Silicon Motion.
Additionally, Client SSD Controller sales are anticipated to increase following the company’s Open-Channel NVMe SSD controller entering into production.
Shares of the company rose more than 4% yesterday.
Silicon Motion Technology Corporation Revenue (TTM)
Silicon Motion Technology Corporation Revenue (TTM) | Silicon Motion Technology Corporation Quote
Revenue Details
Sales from mobile storage products (which include Embedded Storage as well as Expandable Storage products) increased 11% year over year and flat sequentially to $129.8 million. Revenues from mobile storage products contributed 94% to overall product revenues.
Sales for Client SSD controllers grew 35% quarter over quarter. During the reported quarter, the company shipped SSD controllers based on QLC-based PCIe NVMe client SSDs to US NAND flash makers.
Revenues from eMMC and UFScontrollers increased 5% sequentially.
Embedded Storage sales (approximately 85% of total revenues) were stable quarter over quarter. Revenues from SSD solutions declined 40% sequentially.
Mobile communications product (which include mobile TV SoCs) sales were $7 million, representing 5% of total revenues. However, the figure declined 6.7% sequentially and 19.5% year over year.
Other products formed 1% of revenues and generated $1.7 million.
Operational Details
Non-GAAP gross margin expanded 350 basis points (bps) on a year-over-year basis and 500 bps sequentially to 51%.
Non-GAAP operating margin increased 710 bps on year-over-year basis and 140 bps sequentially to 27.1%. Non-GAAP operating expenses as a percentage of revenues decreased from 26% from the year ago quarter to 23.9%. On a sequential basis operating expensed increased 200 bps.
Liquidity & Cash Flow
Exiting the reported quarter, Silicon Motion’s cash, cash equivalent and short-term investments were $308.2 million, down from $364.2 million in the second quarter.
On Oct 24, 2017, its board of directors had declared an annual dividend of $1.20 per ADS. Quarterly instalments to be paid by the company were 30 cents per ADS. On Aug 22, 2018, the company paid $10.8 million to shareholders representing its fourth instalment.
Consequently, on Oct 26, 2018, the company’s Board of Directors had declared a new annual dividend of $1.20 per ADS. Quarterly instalments to be paid by the company were 30 cents per ADS. The company will be paying its first instalment on Nov 23, 2018.
Guidance
For fourth-quarter 2018, Silicon Motion expects non-GAAP revenues to be in the range of $120.5-$127.5 million. The Zacks Consensus Estimate for is currently pegged at $149.8 million.
Non-GAAP gross margin is anticipated within 50-52%. Non-GAAP operating margin is expected to lie in the range of 25% to 27%.
The company predicts lower than expected sales for full year 2018. However, margins are projected to be better than expected due to robust SSD controller sales.
Further, client SSD controllers are expected to show a growth rate of 35% for full year 2018.
Zacks Rank and Other Stocks to Consider
Silicon Motion carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are NetApp, Inc. (NTAP - Free Report) , Intel Corporation (INTC - Free Report) and Upland Software, Inc. (UPLD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NetApp, Intel and Upland Software have a long-term earnings growth rate of 14.1%, 8.4% and 20%, respectively.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>