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Microsemi (MSCC) to Close Manufacturing Facility in China
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Microsemi Corporation announced its decision to close down its manufacturing facility in China.
The company said that the devices manufactured at the facility are not aligned with its strategic direction. So, the resources will be reinvested in higher value and growth products.
The company’s decision is in sync with its global restructuring efforts to rationalize production capacity and reduce operating expenses. While the closure of the Scottsdale Arizona fab has brought cost of sales under control, management has acknowledged the need for further streamlining in order to achieve the operating margin target.
In the last quarter, the company exited several facilities, streamlined various operations and reallocated certain research and development activities. Related charges included $11.2 million for facility consolidation and equipment, and $3.6 million for restructuring, primarily severance.
Though details of the job cut in China has not been revealed, the deal is not expected to have any material impact on the company’s earnings.
Coming to the price performance, over the past one year, shares of Microsemi outperformed the Zacks categorized Semiconductor Analog and Mixed industry. While the industry gained 34.66%, the stock returned 35.34%.
Last Quarter Earnings & 2Q Guidance
Microsemi is a supplier of semiconductor components to defense, aerospace, industrial and communications markets. The company’s first-quarter fiscal 2017 adjusted earnings of 62 cents per share missed the Zacks Consensus Estimate by 8 cents.
However, quarterly revenues of $435.5 million were slightly above the Zacks Consensus Estimate of $435 million and within management’s guidance of $428–$442 million.
For the upcoming quarter, Microsemi expects revenues in the range of $430–$450 million. The Zacks Consensus Estimate of $440.60 million is within the guided range. Non-GAAP earnings per share are likely to be in the range of 86–96 cents, above our estimated 74 cents.
Bottom Line
California-based Microsemi Corporation offers a broad range of semiconductor integrated circuit (IC) products, broadly categorized into the high reliability and analog/mixed signal categories.
The company’s focus on improving product mix, operational efficiency, and consolidation are driving revenues and margins through 2017. Moreover, we have confidence in the company’s strategic positioning, strong fundamentals and growth prospects.
For the current year, estimates for ON Semiconductor went up 7.8% in the last 60 days. Estimates for Alibaba and Advanced Energy increased 23.3% and 18.2%, respectively.
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Microsemi (MSCC) to Close Manufacturing Facility in China
Microsemi Corporation announced its decision to close down its manufacturing facility in China.
The company said that the devices manufactured at the facility are not aligned with its strategic direction. So, the resources will be reinvested in higher value and growth products.
The company’s decision is in sync with its global restructuring efforts to rationalize production capacity and reduce operating expenses. While the closure of the Scottsdale Arizona fab has brought cost of sales under control, management has acknowledged the need for further streamlining in order to achieve the operating margin target.
In the last quarter, the company exited several facilities, streamlined various operations and reallocated certain research and development activities. Related charges included $11.2 million for facility consolidation and equipment, and $3.6 million for restructuring, primarily severance.
Though details of the job cut in China has not been revealed, the deal is not expected to have any material impact on the company’s earnings.
Coming to the price performance, over the past one year, shares of Microsemi outperformed the Zacks categorized Semiconductor Analog and Mixed industry. While the industry gained 34.66%, the stock returned 35.34%.
Last Quarter Earnings & 2Q Guidance
Microsemi is a supplier of semiconductor components to defense, aerospace, industrial and communications markets. The company’s first-quarter fiscal 2017 adjusted earnings of 62 cents per share missed the Zacks Consensus Estimate by 8 cents.
However, quarterly revenues of $435.5 million were slightly above the Zacks Consensus Estimate of $435 million and within management’s guidance of $428–$442 million.
For the upcoming quarter, Microsemi expects revenues in the range of $430–$450 million. The Zacks Consensus Estimate of $440.60 million is within the guided range. Non-GAAP earnings per share are likely to be in the range of 86–96 cents, above our estimated 74 cents.
Bottom Line
California-based Microsemi Corporation offers a broad range of semiconductor integrated circuit (IC) products, broadly categorized into the high reliability and analog/mixed signal categories.
The company’s focus on improving product mix, operational efficiency, and consolidation are driving revenues and margins through 2017. Moreover, we have confidence in the company’s strategic positioning, strong fundamentals and growth prospects.
Microsemi Corporation Price and Consensus
Microsemi Corporation Price and Consensus | Microsemi Corporation Quote
Zacks Rank & Stocks to Consider
Currently, Microsemi carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include ON Semiconductor Corporation (ON - Free Report) , Alibaba Group Holding Limited (BABA - Free Report) and Advanced Energy Industries, Inc. (AEIS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, estimates for ON Semiconductor went up 7.8% in the last 60 days. Estimates for Alibaba and Advanced Energy increased 23.3% and 18.2%, respectively.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>