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Silicon Motion (SIMO) Q2 Earnings Beat Estimates, Revenues Lag

Silicon Motion Technology Corporation SIMO reported mixed second-quarter 2022 results, wherein the bottom line beat the Zacks Consensus Estimate, but the top line missed the same.

Net Income

On a GAAP basis, net income in the quarter improved to $51.6 million or $1.55 per share from $49.5 million or $1.42 per share in the prior-year quarter.
Non-GAAP net income was $62.8 million or $1.88 per share compared with $52.7 million or $1.50 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 17 cents.

 

Silicon Motion Technology Corporation Price, Consensus and EPS Surprise

Silicon Motion Technology Corporation Price, Consensus and EPS Surprise
Silicon Motion Technology Corporation Price, Consensus and EPS Surprise

Silicon Motion Technology Corporation price-consensus-eps-surprise-chart | Silicon Motion Technology Corporation Quote

Revenues

Silicon Motion Technology’s quarterly revenues increased to $252.4 million from $221.1 million in the prior-year quarter. The top line missed the consensus estimate of $263 million. The company experienced strong growth in SSD controller sales to customers building PCle Gen4 SSDs for PC OEMs. The company’s eMMC + UFS controller sales to both smartphone and non-smartphone end markets also grew. However, sales to channel markets softened.

Other Details

Non-GAAP gross profit was $133.8 million compared with $112.9 million in the year-ago quarter. Non-GAAP total operating expenses rose to $56.8 million from $48.4 million. Non-GAAP operating income was $77 million, up from $64.5 million, with respective margins of 30.5% and 29.2%.

Cash Flow & Liquidity

In the first six months of 2022, Silicon Motion Technology generated $1.2 million of cash for operating activities compared with $77.4 million in the year-ago period. As of Jun 30, 2022, the company had $179.9 million in cash and cash equivalents with $44 million of  other liabilities.

Moving Forward

The company is working on the upcoming launch of its next generation enterprise class SSD controllers. The company has also commenced initial sales of 3D SSD controllers to flash partners. However, the semiconductor industry is highly competitive which subjects the company to stiff rivalry from its peer companies such as Micron, Microchip, Marvell and ON Semiconductor. The tense political condition between Taiwan and People’s Republic of China also increases the operating risks of the company.

Zacks Rank & Stocks to Consider

Silicon Motion Technology currently has a Zacks Rank #3 (Hold). the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ingevity Corporation NGVT, sporting a Zacks Rank #1, delivered an earnings surprise of 22.6%, on average, in the trailing four quarters. Over the past year, the stock has fallen 20.8%. Earnings estimates for the current year have moved down 0.5% since July 2021. Ingevity’s primary strategy is to produce high-performance activated carbon materials and specialty chemicals.

ADVERTISEMENT

Assurant, Inc. AIZ, sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 31.1% in the previous quarter and a stellar earnings surprise of 18.3%, on average, in the trailing four quarters. The company is a global provider of risk management solutions in the housing and lifestyle market. Earnings estimates for the current year have moved up 6.5% since July 2021.

Liberty Energy Inc. LBRT has a Zacks Rank #1. The Zacks Consensus Estimate for Liberty Energy’s current-year earnings has been revised 51% upward since July 2021.


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