Monolithic Power Systems Inc. (MPWR - Free Report) reported third-quarter 2017 earnings of 84 cents, which beat the Zacks Consensus Estimate by a couple of cents. The figure surged 27.3% from the year-ago quarter.
Revenues jumped 21.1% from the year-ago quarter to almost $129 million, slightly better than the Zacks Consensus Estimate of $126 million. The figure was better than management’s guidance of $124-$128 million.
DC to DC segment (92.4% of total revenues) revenues increased 24.6% year over year to $119.1 million. Lighting Control (7.6% of total revenues) climbed 9.1% to $9.9 million.
Monolithic’s shares have returned 40.2% year to date, substantially outperforming the 26.5% rally of the industry.
End-Market Details
Consumer (42.9% of total revenues) revenues grew 26.8% from the year-ago quarter to $55.3 million. The year-over-year growth reflected sales gains in high-end consumer applications.
Computing & Storage (22.5% of total revenues) revenues rose 23.7% to $29 million. The growth was attributed to strong sales in cloud computing. The company experienced a significant increase in product sales, reflecting both new design wins and increased dollar content.
Industrial (12.7% of total revenues) revenues grew 12.6% to $16.3 million, driven by increased sales of AC/DC power applications.
Automotive (10% of total revenues) revenues were $12.9 million, up 48.8% from the year-ago quarter. The upside was driven by higher product sales for applications in infotainment, safety and connectivity application products.
Management stated that Automotive is Monolithic’s largest SAM opportunity at $6 billion. The company plans to offer a number of new products for applications in body controls, lighting, infotainment and ADAS.
However, Communications (11.9% of total revenues) revenues declined 5% to $15.4 million.
Operating Details
Gross margin expanded 40 basis points (bps) to 55.7% in the reported quarter. The figure was within management’s guidance of 55.2-56.2%
Operating expenses, as a percentage of revenues, declined 210 bps to 25.5%.
Operating margin expanded 250 bps from the year-ago quarter to 30.2%.
Balance Sheet & Cash Flow
Cash, cash equivalents and investments were $305 million at the end of third-quarter 2017 as compared with $283 million at the end of the previous quarter.
Monolithic generated operating cash flow of about $33.7 million compared with $24.9 million in the previous quarter.
Guidance
For the fourth quarter of 2017, Monolithic forecasts revenues in the range of $123-$129 million. Non-GAAP gross margin is projected between 55.2% and 56.2%.
Zacks Rank & Key Picks
Currently, Monolithic carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the sector are Maxim Integrated Products Inc. , ON Semiconductor Corp. (ON - Free Report) and Analog Devices Inc. (ADI - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Maxim, ON and Analog Devices are currently pegged at 10.3%, 18.1% and 10%, respectively.
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Monolithic Power Systems Inc. (MPWR - Free Report) reported third-quarter 2017 earnings of 84 cents, which beat the Zacks Consensus Estimate by a couple of cents. The figure surged 27.3% from the year-ago quarter.
Revenues jumped 21.1% from the year-ago quarter to almost $129 million, slightly better than the Zacks Consensus Estimate of $126 million. The figure was better than management’s guidance of $124-$128 million.
DC to DC segment (92.4% of total revenues) revenues increased 24.6% year over year to $119.1 million. Lighting Control (7.6% of total revenues) climbed 9.1% to $9.9 million.
Monolithic’s shares have returned 40.2% year to date, substantially outperforming the 26.5% rally of the industry.
End-Market Details
Consumer (42.9% of total revenues) revenues grew 26.8% from the year-ago quarter to $55.3 million. The year-over-year growth reflected sales gains in high-end consumer applications.
Computing & Storage (22.5% of total revenues) revenues rose 23.7% to $29 million. The growth was attributed to strong sales in cloud computing. The company experienced a significant increase in product sales, reflecting both new design wins and increased dollar content.
Industrial (12.7% of total revenues) revenues grew 12.6% to $16.3 million, driven by increased sales of AC/DC power applications.
Automotive (10% of total revenues) revenues were $12.9 million, up 48.8% from the year-ago quarter. The upside was driven by higher product sales for applications in infotainment, safety and connectivity application products.
Management stated that Automotive is Monolithic’s largest SAM opportunity at $6 billion. The company plans to offer a number of new products for applications in body controls, lighting, infotainment and ADAS.
However, Communications (11.9% of total revenues) revenues declined 5% to $15.4 million.
Operating Details
Gross margin expanded 40 basis points (bps) to 55.7% in the reported quarter. The figure was within management’s guidance of 55.2-56.2%
Operating expenses, as a percentage of revenues, declined 210 bps to 25.5%.
Operating margin expanded 250 bps from the year-ago quarter to 30.2%.
Balance Sheet & Cash Flow
Cash, cash equivalents and investments were $305 million at the end of third-quarter 2017 as compared with $283 million at the end of the previous quarter.
Monolithic generated operating cash flow of about $33.7 million compared with $24.9 million in the previous quarter.
Guidance
For the fourth quarter of 2017, Monolithic forecasts revenues in the range of $123-$129 million. Non-GAAP gross margin is projected between 55.2% and 56.2%.
Zacks Rank & Key Picks
Currently, Monolithic carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the sector are Maxim Integrated Products Inc. , ON Semiconductor Corp. (ON - Free Report) and Analog Devices Inc. (ADI - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Maxim, ON and Analog Devices are currently pegged at 10.3%, 18.1% and 10%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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