We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Lower Revenues Dent Monolithic Power (MPWR) Q2 Earnings?
Read MoreHide Full Article
Monolithic Power Systems, Inc. (MPWR - Free Report) is scheduled to report second-quarter 2023 results on Jul 31, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 0.33%. It pulled off a trailing four-quarter earnings surprise of 3.33%, on average.
The Kirkland, WA-based company is likely to report lower revenues year over year in the second quarter, owing to weak demand trends in several verticals, the persistence of near-term business uncertainty and inventory adjustments. However, solid traction in automotive, combined with continuous investment in innovation, portfolio expansion and focus on geographical diversification, is expected to partially cushion the top line.
Factors at Play
Monolithic Power is witnessing solid momentum for its highly integrated solutions for advanced driver assistance systems, the digital cockpit and lighting applications. Worldwide 5G expansion is likely to have acted as a tailwind for the communication vertical. The company is benefiting from an increase in customer engagement for products related to artificial intelligence, autonomous driving and power modules.
Management is taking various initiatives to expand and geographically diversify the company’s global production. This will make Monolithic Power less vulnerable to geopolitical and macroeconomic risks in any single region. It is continuing to ramp up research and development expenditure to accelerate innovation, expand into emerging markets and strengthen its portfolio. These initiatives are likely to have had a favorable impact on the top-line performance.
However, customers' cautious approach, owing to uncertain business conditions is likely to have caused fluctuation in ordering patterns. High inventory buildup induced by imbalances in supply and demand following the pandemic continues to impact gross margin in the near term. This is expected to have a negative effect on the top line.
The Zacks Consensus Estimate for net sales from the Industrial vertical is pegged at $46.5 million, suggesting a decrease from $55.9 million reported in the prior-year quarter. Weakness in data center spending is hurting net sales in the Enterprise Data vertical. The consensus estimate for revenues from this segment is pegged at $46.7 million.
The Zacks Consensus Estimate for net sales in the consumer segment is pegged at $62.1 million, suggesting a sharp decline from $97.3 million in the year-ago quarter. Revenues from the storage and computing vertical are expected to be $117.4 million, indicating a decline from the prior-year quarter’s tally of $122.3 million.
Net sales from the automotive vertical are pegged at $105.9 million, implying solid growth from the $61 million reported in the year-ago quarter. Contribution from the communication vertical is expected to be $61.8 million.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $440 million, indicating a decline from the $461 million reported in the year-ago quarter. The consensus estimate for adjusted earnings per share is pegged at $2.81, suggesting a decrease from $3.25 reported in the prior-year quarter.
Earnings Whispers
Our proven model predicts a likely earnings beat for Monolithic Power this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is precisely the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.31%. The Most Accurate Estimate is pegged at $2.82 while the Zacks Consensus Estimate stands at $2.81. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Monolithic Power Systems, Inc. Price and EPS Surprise
Zacks Rank: Monolithic Power currently has a Zacks Rank #2.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +0.07% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Aug 3.
ON Semiconductor (ON - Free Report) has an Earnings ESP of +1.34% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Jul 31.
Image: Bigstock
Will Lower Revenues Dent Monolithic Power (MPWR) Q2 Earnings?
Monolithic Power Systems, Inc. (MPWR - Free Report) is scheduled to report second-quarter 2023 results on Jul 31, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 0.33%. It pulled off a trailing four-quarter earnings surprise of 3.33%, on average.
The Kirkland, WA-based company is likely to report lower revenues year over year in the second quarter, owing to weak demand trends in several verticals, the persistence of near-term business uncertainty and inventory adjustments. However, solid traction in automotive, combined with continuous investment in innovation, portfolio expansion and focus on geographical diversification, is expected to partially cushion the top line.
Factors at Play
Monolithic Power is witnessing solid momentum for its highly integrated solutions for advanced driver assistance systems, the digital cockpit and lighting applications. Worldwide 5G expansion is likely to have acted as a tailwind for the communication vertical. The company is benefiting from an increase in customer engagement for products related to artificial intelligence, autonomous driving and power modules.
Management is taking various initiatives to expand and geographically diversify the company’s global production. This will make Monolithic Power less vulnerable to geopolitical and macroeconomic risks in any single region. It is continuing to ramp up research and development expenditure to accelerate innovation, expand into emerging markets and strengthen its portfolio. These initiatives are likely to have had a favorable impact on the top-line performance.
However, customers' cautious approach, owing to uncertain business conditions is likely to have caused fluctuation in ordering patterns. High inventory buildup induced by imbalances in supply and demand following the pandemic continues to impact gross margin in the near term. This is expected to have a negative effect on the top line.
The Zacks Consensus Estimate for net sales from the Industrial vertical is pegged at $46.5 million, suggesting a decrease from $55.9 million reported in the prior-year quarter. Weakness in data center spending is hurting net sales in the Enterprise Data vertical. The consensus estimate for revenues from this segment is pegged at $46.7 million.
The Zacks Consensus Estimate for net sales in the consumer segment is pegged at $62.1 million, suggesting a sharp decline from $97.3 million in the year-ago quarter. Revenues from the storage and computing vertical are expected to be $117.4 million, indicating a decline from the prior-year quarter’s tally of $122.3 million.
Net sales from the automotive vertical are pegged at $105.9 million, implying solid growth from the $61 million reported in the year-ago quarter. Contribution from the communication vertical is expected to be $61.8 million.
For the June quarter, the Zacks Consensus Estimate for revenues is pegged at $440 million, indicating a decline from the $461 million reported in the year-ago quarter. The consensus estimate for adjusted earnings per share is pegged at $2.81, suggesting a decrease from $3.25 reported in the prior-year quarter.
Earnings Whispers
Our proven model predicts a likely earnings beat for Monolithic Power this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is precisely the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.31%. The Most Accurate Estimate is pegged at $2.82 while the Zacks Consensus Estimate stands at $2.81. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Monolithic Power Systems, Inc. Price and EPS Surprise
Monolithic Power Systems, Inc. price-eps-surprise | Monolithic Power Systems, Inc. Quote
Zacks Rank: Monolithic Power currently has a Zacks Rank #2.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
QUALCOMM Incorporated (QCOM - Free Report) is set to release quarterly numbers on Aug 2. It has an Earnings ESP of +3.68% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Motorola Solutions, Inc. (MSI - Free Report) has an Earnings ESP of +0.07% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Aug 3.
ON Semiconductor (ON - Free Report) has an Earnings ESP of +1.34% and carries a Zacks Rank of 2. The company is set to report quarterly numbers on Jul 31.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.