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Monolithic Power (MPWR) Q2 Earnings, Revenues Beat Estimates

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Monolithic Power Systems, Inc. (MPWR - Free Report) reported second-quarter 2022 non-GAAP earnings of $3.25 per share, which beat the Zacks Consensus Estimate by 10.5%. The bottom line improved 79.6% on a year-over-year basis.

Quarter Details

Revenues of $461 million rose 57.2% from the year-ago quarter’s figure and surpassed the Zacks Consensus Estimate by 7.2%. On a sequential basis, the top line grew 22.1%. Strong demand across all six end markets drove the year-over-year growth.

Segment Performance

In the first quarter, the company had reorganized its markets and segregated Computing and Storage into two — Storage and Computing, and Enterprise Data.

Storage and Computing (26.5% of total revenues) revenues increased 111.6% year over year to $122.3 million. The performance was driven by an increase in market share for storage applications.

Enterprise Data (14.1%) revenues were $65.2 million, up 117.9% from the prior-year quarter’s figure.

Automotive (13.2%) revenues were $61 million, up 25.3% from the prior-year quarter’s figure. The company is witnessing sales growth in infotainment, lighting and Advanced Driver Assistance Systems products.

Industrial (12.1%) revenues increased 28.9% year over year to $55.9 million, courtesy of higher industrial meters and power sources sales.

Communications (12.9%) revenues grew 58.3% to $59.2 million.

Consumer (21.1%) revenues moved up 27.9% from the year-ago quarter to $97.3 million.

By product family, revenues in DC to DC (96% of total revenues) surged 58.6% year over year to $442.3 million. Lighting Control (4%) revenues rallied 29.3% to $18.8 million.

Other Details

Non-GAAP gross margin expanded 270 basis points (bps) from the year-ago quarter’s level to 59%. Non-GAAP operating expenses amounted to $92.7 million, up 31.9%. Non-GAAP operating income rose 89% year over year to $179.4 million.
As of Jun 30, 2022, the company had $342.9 million in cash and cash equivalents with $60.7 million of other long-term liabilities.

Outlook

MPWR continues to execute its long-term plan for sustainable growth. For the third quarter, it projects revenues between $480 million and $500 million. Non-GAAP gross margin is expected between 58.7% and 59.3%. The company is investing in markets like industrial, server and communications that have strong growth potential over the long term. The company is also engaged in the development of its e-commerce platform. However, it faces significant competition in the analog market. Its highly cyclical business is exposed to rapid product obsolescence and short product life cycles.

Zacks Rank & Stocks to Consider

Monolithic Power currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

United States Cellular Corporation (USM - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 23.1%, on average, in the trailing four quarters. Over the past year, the stock has fallen 10%.

Earnings estimates for the current year have moved down 44.4% since August 2021. United States Cellular’s primary strategy is to provide a range of wireless products and services, and a high-quality network to increase competitiveness.

New Fortress Energy Inc. (NFE - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 73.9% in the previous quarter and a stellar earnings surprise of 57.6%, on average, in the trailing four quarters. The company operates as an integrated gas-to-power infrastructure company that provides energy and development services to end-users worldwide.

Earnings estimates for the current year have moved up 95.6% since August 2021.

Lumen Technologies, Inc. (LUMN - Free Report) sports a Zacks Rank #1. The Zacks Consensus Estimate for Lumen Technologies current-year earnings has been revised 39.8% upward since August 2021.

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