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Why Is Monolithic (MPWR) Up 4.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Monolithic Power (MPWR - Free Report) . Shares have added about 4.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Monolithic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Monolithic Power Tops Q4 Earnings & Revenue Estimates
Monolithic reported healthy fourth-quarter 2023 results, with the bottom and top lines beating the Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income fell to $96.9 million or $1.98 per share from $119.1 million or $2.45 per share in the prior-year quarter. The decline was primarily due to an increase in operating expenses.
Non-GAAP net income was $140.9 million or $2.88 per share compared with $154 million or $3.17 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 3 cents.
For 2023, GAAP net income was $427.4 million or $8.76 per share compared with $437.7 million or $9.05 per share in 2022. Excluding stock-based compensation of $149.7 million, net deferred compensation plan expense of $1.1 million, amortization of purchased intangible assets of $0.1 million and $3.6 million for related tax effects non-GAAP net income amounted to $574.6 million or $11.78 per share compared with $599.9 million or $12.41 per share in 2022.
Revenues
Quarterly revenues for Monolithic Power were $454 million compared with $460 million a year ago. The top line surpassed the Zacks Consensus Estimate by 0.4%.
For 2023, the company experienced a 1.5% top-line expansion, with net sales increasing to $1,821.1 million from $1,794.1 million in 2022. Despite revenue decline in the Industrial, Communications and Consumer markets, healthy growth trends in the Automative, Enterprise Data and Storage and Computing segments positively impacted the top-line performance.
During the quarter, Storage and Computing revenues decreased to $117.3 million from $120.8 million in the prior-year quarter. For 2023, revenues grew to $491.1 million from $452.5 million in 2022. This 8.5% increase was primarily driven by higher sales of products for enterprise notebooks and storage applications. In the fourth quarter, Enterprise data saw massive growth of $128.8 million compared with $68.4 million in the prior-year quarter. For 2023, revenues from the segment increased 28.5% to $323 million. Increased sales of power management solutions for AI applications contributed to the impressive growth.
Revenues from the Automative segment grew 31.5% to $394.7 million in 2023 from $300 million in 2022. The growth was primarily attributable to increased sales of highly integrated applications supporting advanced driver assistance systems, the digital cockpit and lighting applications. For the fourth quarter, it fell to $89.7 million from $97.3 million a year ago. As 4G and 5G infrastructure sales decreased, the Communications segment witnessed a decline of 18.5% to 204.9 million year over year for 2023. It recorded revenues of $40.9 million in the fourth quarter compared with $64.2 million in the prior-year quarter.
In the December quarter, Industrial revenues were down to $33.3 million from $56 million in previous year's quarter. It fell 21.2% year over year to $172.7 million in 2023 from $219.1 million in 2022. The drop reflected lower sales in applications for industrial automation, security and power sources. Revenues from the Consumer segment witnessed a 26.6% decline to $234.7 million year over year in 2023. For the quarter, revenues were $43.7 million compared with $53 million in prior year quarter.
By product family, revenues in DC to DC surged to $427.8 million in the fourth quarter from $432.5 million in the prior-year quarter. The year’s revenues increased to $1,718.6 million from $1,696.5 million in 2022. For the fourth quarter, Lighting Control revenues were marginally down to $26.1 million from $27.5 million. However, 2023’s revenues totaled $102.4 million compared with $97.5 million in 2022.
Other Details
Non-GAAP gross margin contracted 280 basis points from the year-ago quarter to 55.7%. The reduction was mainly due to the sales mix. Non-GAAP operating expenses were $96.7 million, up from $94.8 million in the prior-year quarter. Non-GAAP operating income fell 10.3% year over year to $156.1 million.
Cash Flow & Liquidity
As of Dec 31, 2023, cash and cash equivalents amounted to $527.8 million and long-term liabilities were $88.6 million compared with respective tallies of $288.6 million and $73.4 million as of Dec 31, 2022.
Outlook
MPWR remains cautious about near-term business conditions as competition in the supply chain persists. For the first quarter of 2024, the company projects revenues within the range of $437 million to $457 million. Non-GAAP gross margin is estimated between 55.4% and 56.0%. On a non-GAAP basis, operating expenses are expected to be between $101.8 million and $103.8 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Monolithic has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Monolithic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Monolithic is part of the Zacks Semiconductor - Analog and Mixed industry. Over the past month, M/A-Com (MTSI - Free Report) , a stock from the same industry, has gained 19.5%. The company reported its results for the quarter ended December 2023 more than a month ago.
M/A-Com reported revenues of $157.15 million in the last reported quarter, representing a year-over-year change of -12.7%. EPS of $0.58 for the same period compares with $0.81 a year ago.
For the current quarter, M/A-Com is expected to post earnings of $0.58 per share, indicating a change of -26.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for M/A-Com. Also, the stock has a VGM Score of F.
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Why Is Monolithic (MPWR) Up 4.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Monolithic Power (MPWR - Free Report) . Shares have added about 4.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Monolithic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Monolithic Power Tops Q4 Earnings & Revenue Estimates
Monolithic reported healthy fourth-quarter 2023 results, with the bottom and top lines beating the Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income fell to $96.9 million or $1.98 per share from $119.1 million or $2.45 per share in the prior-year quarter. The decline was primarily due to an increase in operating expenses.
Non-GAAP net income was $140.9 million or $2.88 per share compared with $154 million or $3.17 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 3 cents.
For 2023, GAAP net income was $427.4 million or $8.76 per share compared with $437.7 million or $9.05 per share in 2022. Excluding stock-based compensation of $149.7 million, net deferred compensation plan expense of $1.1 million, amortization of purchased intangible assets of $0.1 million and $3.6 million for related tax effects non-GAAP net income amounted to $574.6 million or $11.78 per share compared with $599.9 million or $12.41 per share in 2022.
Revenues
Quarterly revenues for Monolithic Power were $454 million compared with $460 million a year ago. The top line surpassed the Zacks Consensus Estimate by 0.4%.
For 2023, the company experienced a 1.5% top-line expansion, with net sales increasing to $1,821.1 million from $1,794.1 million in 2022. Despite revenue decline in the Industrial, Communications and Consumer markets, healthy growth trends in the Automative, Enterprise Data and Storage and Computing segments positively impacted the top-line performance.
During the quarter, Storage and Computing revenues decreased to $117.3 million from $120.8 million in the prior-year quarter. For 2023, revenues grew to $491.1 million from $452.5 million in 2022. This 8.5% increase was primarily driven by higher sales of products for enterprise notebooks and storage applications. In the fourth quarter, Enterprise data saw massive growth of $128.8 million compared with $68.4 million in the prior-year quarter. For 2023, revenues from the segment increased 28.5% to $323 million. Increased sales of power management solutions for AI applications contributed to the impressive growth.
Revenues from the Automative segment grew 31.5% to $394.7 million in 2023 from $300 million in 2022. The growth was primarily attributable to increased sales of highly integrated applications supporting advanced driver assistance systems, the digital cockpit and lighting applications. For the fourth quarter, it fell to $89.7 million from $97.3 million a year ago. As 4G and 5G infrastructure sales decreased, the Communications segment witnessed a decline of 18.5% to 204.9 million year over year for 2023. It recorded revenues of $40.9 million in the fourth quarter compared with $64.2 million in the prior-year quarter.
In the December quarter, Industrial revenues were down to $33.3 million from $56 million in previous year's quarter. It fell 21.2% year over year to $172.7 million in 2023 from $219.1 million in 2022. The drop reflected lower sales in applications for industrial automation, security and power sources. Revenues from the Consumer segment witnessed a 26.6% decline to $234.7 million year over year in 2023. For the quarter, revenues were $43.7 million compared with $53 million in prior year quarter.
By product family, revenues in DC to DC surged to $427.8 million in the fourth quarter from $432.5 million in the prior-year quarter. The year’s revenues increased to $1,718.6 million from $1,696.5 million in 2022. For the fourth quarter, Lighting Control revenues were marginally down to $26.1 million from $27.5 million. However, 2023’s revenues totaled $102.4 million compared with $97.5 million in 2022.
Other Details
Non-GAAP gross margin contracted 280 basis points from the year-ago quarter to 55.7%. The reduction was mainly due to the sales mix. Non-GAAP operating expenses were $96.7 million, up from $94.8 million in the prior-year quarter. Non-GAAP operating income fell 10.3% year over year to $156.1 million.
Cash Flow & Liquidity
As of Dec 31, 2023, cash and cash equivalents amounted to $527.8 million and long-term liabilities were $88.6 million compared with respective tallies of $288.6 million and $73.4 million as of Dec 31, 2022.
Outlook
MPWR remains cautious about near-term business conditions as competition in the supply chain persists. For the first quarter of 2024, the company projects revenues within the range of $437 million to $457 million. Non-GAAP gross margin is estimated between 55.4% and 56.0%. On a non-GAAP basis, operating expenses are expected to be between $101.8 million and $103.8 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Monolithic has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Monolithic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Monolithic is part of the Zacks Semiconductor - Analog and Mixed industry. Over the past month, M/A-Com (MTSI - Free Report) , a stock from the same industry, has gained 19.5%. The company reported its results for the quarter ended December 2023 more than a month ago.
M/A-Com reported revenues of $157.15 million in the last reported quarter, representing a year-over-year change of -12.7%. EPS of $0.58 for the same period compares with $0.81 a year ago.
For the current quarter, M/A-Com is expected to post earnings of $0.58 per share, indicating a change of -26.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for M/A-Com. Also, the stock has a VGM Score of F.