Monolithic Power Systems Inc. (MPWR - Free Report) delivered first-quarter 2018 earnings of 79 cents, which beat the Zacks Consensus Estimate by a couple of cents. The figure surged 36.2% on a year-over-year basis.
Revenues surpassed the Zacks Consensus Estimate of $125 million and improved 28.7% from the year-ago quarter to $129.2 million. The figure was better than management’s guidance of $122-$128 million.
Robust demand in high-end consumer markets, including the likes of power chargers, lighting and home appliances aided growth. The company’s strategic business mix in diversified markets is also a positive. Management revealed that upside in few traditional consumer markets benefited performance.
DC to DC segment (92.3% of total revenues) revenues increased 30.5% year over year to $119.27 million. Lighting Control (7.6% of total revenues) climbed 10.6% to $9.88 million.
Monolithic’s shares have returned 28% in the past year, substantially outperforming industry’s rally of 12.4%.
End-Market Details
Consumer (36.5% of total revenues) revenues grew 32.4% from the year-ago quarter to $47.1 million. Sales gains in high-end consumer applications drove year-over-year growth. Further impressive sales in SSD storage, high end notebooks and cloud computing aided segment performance.
Computing & Storage (24.0% of total revenues) revenues rose 50.2% to $30.9 million. The upside was driven by higher product sales for applications in safety, infotainment and connectivity application products.
Industrial (13.6% of total revenues) revenues grew 14.3% to $17.6 million.
Automotive (13.7% of total revenues) revenues were $17.7 million, up 43.8% from the year-ago quarter primarily due to improvement in sales of smart meters, security and power sources.
However, Communications (12.2% of total revenues) revenues declined 4.3% to $15.8 million.
Operating Details
Non-GAAP gross margin expanded 40 basis points (bps) year over year to 55.9% in the reported quarter.
Non-GAAP operating expenses were $34.9 million during the quarter, up 19.9% year over year.
Operating margin expanded 830 bps from the year-ago quarter to 27.1%.
Balance Sheet & Cash Flow
Cash, cash equivalents and investments were $76.02 million at the end of fourth-quarter 2017 down from $82.76 million at the end of the previous quarter.
Monolithic Power generated operating cash flow of about $16.3 million down from $21.9 million in the previous quarter.
Guidance
For the second quarter of 2018, Monolithic Power forecasts revenues in the range of $135-$141million. Non-GAAP gross margin is projected between 55.4% and 56.4%.
Zacks Rank & Key Picks
Currently, Monolithic Power carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Seagate Technology PLC (STX - Free Report) , Mellanox Technologies, Ltd. and Micron Technology, Inc. (MU - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The projected earnings growth rate (3-5 years) for Seagate, Mellanox and Micron are 15.60%, 15% and 10%, respectively.
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Monolithic Power Systems Inc. (MPWR - Free Report) delivered first-quarter 2018 earnings of 79 cents, which beat the Zacks Consensus Estimate by a couple of cents. The figure surged 36.2% on a year-over-year basis.
Revenues surpassed the Zacks Consensus Estimate of $125 million and improved 28.7% from the year-ago quarter to $129.2 million. The figure was better than management’s guidance of $122-$128 million.
Robust demand in high-end consumer markets, including the likes of power chargers, lighting and home appliances aided growth. The company’s strategic business mix in diversified markets is also a positive. Management revealed that upside in few traditional consumer markets benefited performance.
DC to DC segment (92.3% of total revenues) revenues increased 30.5% year over year to $119.27 million. Lighting Control (7.6% of total revenues) climbed 10.6% to $9.88 million.
Monolithic’s shares have returned 28% in the past year, substantially outperforming industry’s rally of 12.4%.
End-Market Details
Consumer (36.5% of total revenues) revenues grew 32.4% from the year-ago quarter to $47.1 million. Sales gains in high-end consumer applications drove year-over-year growth. Further impressive sales in SSD storage, high end notebooks and cloud computing aided segment performance.
Computing & Storage (24.0% of total revenues) revenues rose 50.2% to $30.9 million. The upside was driven by higher product sales for applications in safety, infotainment and connectivity application products.
Industrial (13.6% of total revenues) revenues grew 14.3% to $17.6 million.
Automotive (13.7% of total revenues) revenues were $17.7 million, up 43.8% from the year-ago quarter primarily due to improvement in sales of smart meters, security and power sources.
However, Communications (12.2% of total revenues) revenues declined 4.3% to $15.8 million.
Operating Details
Non-GAAP gross margin expanded 40 basis points (bps) year over year to 55.9% in the reported quarter.
Non-GAAP operating expenses were $34.9 million during the quarter, up 19.9% year over year.
Operating margin expanded 830 bps from the year-ago quarter to 27.1%.
Balance Sheet & Cash Flow
Cash, cash equivalents and investments were $76.02 million at the end of fourth-quarter 2017 down from $82.76 million at the end of the previous quarter.
Monolithic Power generated operating cash flow of about $16.3 million down from $21.9 million in the previous quarter.
Guidance
For the second quarter of 2018, Monolithic Power forecasts revenues in the range of $135-$141million. Non-GAAP gross margin is projected between 55.4% and 56.4%.
Zacks Rank & Key Picks
Currently, Monolithic Power carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Seagate Technology PLC (STX - Free Report) , Mellanox Technologies, Ltd. and Micron Technology, Inc. (MU - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The projected earnings growth rate (3-5 years) for Seagate, Mellanox and Micron are 15.60%, 15% 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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