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Will Weak Revenues Hurt Monolithic Power's (MPWR) Q1 Earnings?
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Monolithic Power Systems, Inc. (MPWR - Free Report) is set to report its first-quarter 2024 results on May 1, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 1.05%. It pulled off a trailing four-quarter earnings surprise of 0.52%, on average. The Kirkland, WA-based company is likely to report lower revenues year over year in the first quarter due to sluggish demand trends in the Consumer, Communications and Industrial verticals. However, strong momentum in the Enterprise Data verticals is a positive factor.
Factors at Play
During the quarter, Monolithic Power announced that it has acquired Axign B.V., a Netherlands-based fabless semiconductor startup specializing in programmable multicore digital signal processors. Axign’s audio processors demonstrate near-zero distortion signals with significantly reduced power consumption for automotive and consumer audio systems. By integrating Axign's revolutionary audio signal processing and amplification technologies, it is bolstering its portfolio tailored to a multitude of applications spanning automotive, residential, concert venues and stadiums. This is likely to get reflected in the upcoming results.
The company is witnessing healthy traction in its power management portfolio for AI GPU applications. Demand for its CPU data center solutions also remains strong. These factors are expected to have driven net sales in the Enterprise Data vertical.
Monolithic Power is placing a strong emphasis on expanding its portfolio by introducing innovative new products in the market and accelerating design wins across its broad base of customers. Efforts to diversify the operating footprint are a tailwind. However, fluctuating ordering patterns, owing to the uncertain macro environment, are affecting net sales in several verticals.
The Zacks Consensus Estimate for net sales in the Communication segment is pegged at $39.88 million, suggesting a sharp decline from $68 million in the year-ago quarter. Contribution from the consumer vertical is expected to be $39.24 million, implying a decline from $63 million reported in the year-ago quarter.
The Zacks Consensus Estimate for net sales from the Industrial vertical is pegged at $30.95 million, suggesting a reduction from $47.47 million reported in the prior-year quarter. The consensus estimate for revenues from the Enterprise Data vertical is pegged at $145 million, implying healthy growth from $47.16 million in the year-ago quarter.
Revenues from the storage and computing vertical are expected to be $109 million, indicating a decrease from the prior-year quarter’s tally of $120 million. Net sales from the automotive vertical are pegged at $83 million, indicating a decline from $105 million reported in the year-ago quarter.
For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $448 million, suggesting a decline from $451 million reported in the year-ago quarter. The consensus estimate for adjusted earnings per share is pegged at $2.66, implying a decrease from $3 reported in the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively predict an 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 not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.43%. 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
United States Cellular Corporation (USM - Free Report) has an Earnings ESP of +36.36% and sports a Zacks Rank of 1 at present. It is scheduled to report quarterly numbers on May 2.
The Earnings ESP for Silicon Motion Technology (SIMO - Free Report) is +5.96% and it carries a Zacks Rank of 2 at present. The company is scheduled to report quarterly numbers on May 2.
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Will Weak Revenues Hurt Monolithic Power's (MPWR) Q1 Earnings?
Monolithic Power Systems, Inc. (MPWR - Free Report) is set to report its first-quarter 2024 results on May 1, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 1.05%. It pulled off a trailing four-quarter earnings surprise of 0.52%, on average. The Kirkland, WA-based company is likely to report lower revenues year over year in the first quarter due to sluggish demand trends in the Consumer, Communications and Industrial verticals. However, strong momentum in the Enterprise Data verticals is a positive factor.
Factors at Play
During the quarter, Monolithic Power announced that it has acquired Axign B.V., a Netherlands-based fabless semiconductor startup specializing in programmable multicore digital signal processors. Axign’s audio processors demonstrate near-zero distortion signals with significantly reduced power consumption for automotive and consumer audio systems. By integrating Axign's revolutionary audio signal processing and amplification technologies, it is bolstering its portfolio tailored to a multitude of applications spanning automotive, residential, concert venues and stadiums. This is likely to get reflected in the upcoming results.
The company is witnessing healthy traction in its power management portfolio for AI GPU applications. Demand for its CPU data center solutions also remains strong. These factors are expected to have driven net sales in the Enterprise Data vertical.
Monolithic Power is placing a strong emphasis on expanding its portfolio by introducing innovative new products in the market and accelerating design wins across its broad base of customers. Efforts to diversify the operating footprint are a tailwind. However, fluctuating ordering patterns, owing to the uncertain macro environment, are affecting net sales in several verticals.
The Zacks Consensus Estimate for net sales in the Communication segment is pegged at $39.88 million, suggesting a sharp decline from $68 million in the year-ago quarter. Contribution from the consumer vertical is expected to be $39.24 million, implying a decline from $63 million reported in the year-ago quarter.
The Zacks Consensus Estimate for net sales from the Industrial vertical is pegged at $30.95 million, suggesting a reduction from $47.47 million reported in the prior-year quarter. The consensus estimate for revenues from the Enterprise Data vertical is pegged at $145 million, implying healthy growth from $47.16 million in the year-ago quarter.
Revenues from the storage and computing vertical are expected to be $109 million, indicating a decrease from the prior-year quarter’s tally of $120 million. Net sales from the automotive vertical are pegged at $83 million, indicating a decline from $105 million reported in the year-ago quarter.
For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $448 million, suggesting a decline from $451 million reported in the year-ago quarter. The consensus estimate for adjusted earnings per share is pegged at $2.66, implying a decrease from $3 reported in the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively predict an 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 not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.43%. 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: MPWR currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post a beat this season:
Qualcomm Incorporated (QCOM - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank #2 at present. It is set to release quarterly numbers on May 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
United States Cellular Corporation (USM - Free Report) has an Earnings ESP of +36.36% and sports a Zacks Rank of 1 at present. It is scheduled to report quarterly numbers on May 2.
The Earnings ESP for Silicon Motion Technology (SIMO - Free Report) is +5.96% and it carries a Zacks Rank of 2 at present. The company is scheduled to report quarterly numbers on May 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.