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Monolithic Power (MPWR) Q2 Earnings Beat, Revenues Fall Y/Y
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Monolithic Power Systems, Inc. (MPWR - Free Report) reported relatively modest second-quarter 2023 results, with the bottom and the top line surpassing the respective Zacks Consensus Estimate. However, both revenues and GAAP earnings decreased year over year, owing to a challenging macroeconomic environment.
The Kirkland, Washington-based company witnessed sluggish demand trends in several verticals. However, solid momentum in Automotive and growth in Storage and Computing verticals partially reversed this trend. Fluctuating ordering patterns due to uncertain business conditions hindered the top line.
Net Income
Net income, on a GAAP basis, was $99.5 million or $2.04 per share compared with $114.7 million or $2.37 per share in the prior-year quarter. The decline was primarily attributable to lower net sales and higher operating expenses.
Non-GAAP net income declined to $137.5 million or $2.82 per share from $157 million or $3.25 per share in the year-ago quarter. Nevertheless, the bottom line beat the Zacks Consensus Estimate by a penny.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Monolithic Power registered revenues of $441.1 million, down from $461 million in the prior-year quarter. The top line beat the Zacks Consensus Estimate of $440 million. Despite a solid performance in Automotive vertical, lower net sales in Consumer, Communications and Enterprise Data verticals hurt the top line.
Net sales from Storage and Computing rose to $124.5 million from $122.3 million in the prior-year quarter. Higher commercial notebook sales supported the top line. Revenues surpassed the Zacks consensus estimate of $117.4 million.
Net sales from Enterprise Data declined to $48 million from $65.2 million in the year-ago quarter. Demand softness for CPU applications affected the net sales from this vertical. Revenues surpassed the Zacks Consensus Estimate of $46.7 million.
In the second quarter, the Automotive segment generated $104.4 million in revenues compared with $61 million in the prior-year quarter. The top line fell short of the Zacks Consensus Estimate of $105.9 million.
During the June quarter, Industrial revenues totaled at $49.7 million compared with $55.9 million in the year-ago quarter. Despite the year-over-year decline, sequential growth in sales of products for power source and industrial meter applications partially reversed the downward trend. The top line beat the Zacks Consensus Estimate of $46.5 million.
The Communications vertical contributed $49.3 million to revenues compared with $59.3 million in the year-ago quarter. Lower infrastructure sales impeded the top line in this segment. Revenues missed the Zacks Consensus Estimate of $61.8 million.
Revenues in the Consumer segment were $65.2 million, down from $97.3 million in the prior-year quarter. Net sales beat the Zacks Consensus Estimate of $62.1 million.
By product family, revenues in DC-to-DC decreased to $418.2 million from $442.3 million. In the second quarter, Lighting Control revenues improved to $23 million from $18.8 million in the prior-year quarter.
Other Details
During the reported quarter, non-GAAP gross margin was 56.5%, down from 59% reported the prior-year quarter. Unfavorable variances and higher direct costs impacted the gross margin.
Non-GAAP operating expenses came in at $96 million compared with $92.7 million reported in the prior-year period. Non-GAAP operating income was $153.1 million, down from $179.4 million, owing to top-line decline.
Cash Flow & Liquidity
During the quarter, the company generated operating cash flow of $90.2 million. As of Jun 30, 2023, cash and cash equivalents aggregated $507 million, with $76.7 million in other long-term liabilities.
Outlook
For the third quarter of 2023, the company expects revenues within the range of $464-$484 million. Non-GAAP gross margin is projected between 55.7% and 56.3%. Non-GAAP operating expenses are estimated between $96.9 million to $98.9 million. Total stock-based compensation expenses are expected in the vicinity of $33.5 million to $35.5 million.
Despite near-term uncertainty, management expects the company to be well-positioned for future growth. Development of EV power management applications, focus on broadening customer base for AI applications and new design wins in battery management solutions are expected to bring long-term benefits.
Akamai is a global provider of content delivery networks and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. It delivered an earnings surprise of 579.03% in the last reported quarter.
It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Workday Inc. (WDAY - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 13.05%, on average, in the trailing four quarters.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, which makes it easier for organizations to provide analytical insights and decision support.
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Monolithic Power (MPWR) Q2 Earnings Beat, Revenues Fall Y/Y
Monolithic Power Systems, Inc. (MPWR - Free Report) reported relatively modest second-quarter 2023 results, with the bottom and the top line surpassing the respective Zacks Consensus Estimate. However, both revenues and GAAP earnings decreased year over year, owing to a challenging macroeconomic environment.
The Kirkland, Washington-based company witnessed sluggish demand trends in several verticals. However, solid momentum in Automotive and growth in Storage and Computing verticals partially reversed this trend. Fluctuating ordering patterns due to uncertain business conditions hindered the top line.
Net Income
Net income, on a GAAP basis, was $99.5 million or $2.04 per share compared with $114.7 million or $2.37 per share in the prior-year quarter. The decline was primarily attributable to lower net sales and higher operating expenses.
Non-GAAP net income declined to $137.5 million or $2.82 per share from $157 million or $3.25 per share in the year-ago quarter. Nevertheless, the bottom line beat the Zacks Consensus Estimate by a penny.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Monolithic Power Systems, Inc. price-consensus-eps-surprise-chart | Monolithic Power Systems, Inc. Quote
Revenues
Monolithic Power registered revenues of $441.1 million, down from $461 million in the prior-year quarter. The top line beat the Zacks Consensus Estimate of $440 million. Despite a solid performance in Automotive vertical, lower net sales in Consumer, Communications and Enterprise Data verticals hurt the top line.
Net sales from Storage and Computing rose to $124.5 million from $122.3 million in the prior-year quarter. Higher commercial notebook sales supported the top line. Revenues surpassed the Zacks consensus estimate of $117.4 million.
Net sales from Enterprise Data declined to $48 million from $65.2 million in the year-ago quarter. Demand softness for CPU applications affected the net sales from this vertical. Revenues surpassed the Zacks Consensus Estimate of $46.7 million.
In the second quarter, the Automotive segment generated $104.4 million in revenues compared with $61 million in the prior-year quarter. The top line fell short of the Zacks Consensus Estimate of $105.9 million.
During the June quarter, Industrial revenues totaled at $49.7 million compared with $55.9 million in the year-ago quarter. Despite the year-over-year decline, sequential growth in sales of products for power source and industrial meter applications partially reversed the downward trend. The top line beat the Zacks Consensus Estimate of $46.5 million.
The Communications vertical contributed $49.3 million to revenues compared with $59.3 million in the year-ago quarter. Lower infrastructure sales impeded the top line in this segment. Revenues missed the Zacks Consensus Estimate of $61.8 million.
Revenues in the Consumer segment were $65.2 million, down from $97.3 million in the prior-year quarter. Net sales beat the Zacks Consensus Estimate of $62.1 million.
By product family, revenues in DC-to-DC decreased to $418.2 million from $442.3 million. In the second quarter, Lighting Control revenues improved to $23 million from $18.8 million in the prior-year quarter.
Other Details
During the reported quarter, non-GAAP gross margin was 56.5%, down from 59% reported the prior-year quarter. Unfavorable variances and higher direct costs impacted the gross margin.
Non-GAAP operating expenses came in at $96 million compared with $92.7 million reported in the prior-year period. Non-GAAP operating income was $153.1 million, down from $179.4 million, owing to top-line decline.
Cash Flow & Liquidity
During the quarter, the company generated operating cash flow of $90.2 million. As of Jun 30, 2023, cash and cash equivalents aggregated $507 million, with $76.7 million in other long-term liabilities.
Outlook
For the third quarter of 2023, the company expects revenues within the range of $464-$484 million. Non-GAAP gross margin is projected between 55.7% and 56.3%. Non-GAAP operating expenses are estimated between $96.9 million to $98.9 million. Total stock-based compensation expenses are expected in the vicinity of $33.5 million to $35.5 million.
Despite near-term uncertainty, management expects the company to be well-positioned for future growth. Development of EV power management applications, focus on broadening customer base for AI applications and new design wins in battery management solutions are expected to bring long-term benefits.
Zacks Rank & Other Stocks to Consider
MPWR currently carries a Zacks Rank #2 (Buy).
Akamai Technologies, Inc. (AKAM - Free Report) , currently carrying a Zacks Rank #2, delivered an earnings surprise of 4.9%, on average, in the trailing four quarters. It delivered an earnings surprise of 6.06% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Akamai is a global provider of content delivery networks and cloud infrastructure services. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Akamai’s offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. It delivered an earnings surprise of 579.03% in the last reported quarter.
It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Workday Inc. (WDAY - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 13.05%, on average, in the trailing four quarters.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, which makes it easier for organizations to provide analytical insights and decision support.