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Silicon Motion (SIMO) Reports Strong Preliminary Q2 Results

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Silicon Motion Technology (SIMO - Free Report) recently reported preliminary second-quarter 2021 results. The company now expects revenues to grow 25% quarter over quarter. Earlier, the company had guided (on May 6, 2021) revenue growth to be in the range of 5-10% on a sequential basis.

For second-quarter 2021, Silicon Motion expects non-GAAP revenues in the range of $192-$201 million. The Zacks Consensus Estimate is currently pegged at $198 million, which represents year-over-year growth of 44.1%. Silicon Motion is scheduled to report second-quarter 2021 results on Jul 29, 2021.

Gross margin for the quarter is now anticipated to be at least half a percentage point above the high end of the previously mentioned guidance of 48-50%. However, the company did not provide any update on its non-GAAP operating margin metrics. It formerly guided non-GAAP operating margin to be 26-28%.

The consensus mark for second-quarter earnings is pegged at $1.24 per American Depositary Share, up 5.1% in the past 60 days.

Following the preliminary earnings, Silicon Motion’s shares moved up 2% and closed at $62.41 on Jul 8. Shares of this Zacks Rank #2 (Buy) company have returned 29.6% compared with industry’s rally of 5.9% year to date.


Second-Quarter Growth Drivers

Silicon Motion is one of the leading providers of NAND flash-based controllers for solid-state storage devices or SSDs.

Revenues for the second quarter of 2021 are likely to benefit from continued momentum in SSD controller sales as well as healthy sales of eMMC and UFS controllers.

Higher PC sales, sparked by online education and work-from-home wave, hold promise. Solid PC shipments are anticipated to drive demand for the company’s PCIe NVMe SSD controllers.

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