As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the analog semiconductors industry, including Skyworks Solutions (NASDAQ:SWKS) and its peers.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 1.2% below.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. However, analog semiconductors stocks have held steady amidst all this with share prices up 1.6% on average since the latest earnings results.
Skyworks Solutions (NASDAQ:SWKS) Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Skyworks Solutions reported revenues of $905.5 million, down 15.5% year on year. This print was in line with analysts’ expectations, but overall, it was a weak quarter for the company with an increase in its inventory levels.
“Skyworks generated solid results and strong profitability consistent with our guidance,” said Liam K. Griffin, chairman, chief executive officer and president of Skyworks.
Unsurprisingly, the stock is down 7.2% since reporting and currently trades at $109.30.
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Best Q2: Himax (NASDAQ:HIMX) Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Himax reported revenues of $239.6 million, up 2% year on year, outperforming analysts’ expectations by 2.9%. It was an exceptional quarter for the company with a significant improvement in its gross and operating margin.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $5.91.
Weakest Q2: Universal Display (NASDAQ:OLED) Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.
Universal Display reported revenues of $158.5 million, up 8.1% year on year, in line with analysts’ expectations. It was a weak quarter for the company with a miss of analysts’ EPS estimates.
As expected, the stock is down 8.9% since the results and currently trades at $193.58.
ON Semiconductor (NASDAQ:ON) Spun out of Motorola (NYSE:MSI) in 1999 and built through a series of acquisitions, ON Semiconductor (NASDAQ:ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers.
ON Semiconductor reported revenues of $1.74 billion, down 17.2% year on year, in line with analysts’ expectations. Zooming out, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and an increase in its inventory levels.
The stock is up 11.1% since reporting and currently trades at $77.95.
Monolithic Power Systems (NASDAQ:MPWR) Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Monolithic Power Systems reported revenues of $507.4 million, up 15% year on year, surpassing analysts’ expectations by 3.4%. Taking a step back, it was a strong quarter for the company with optimistic revenue guidance for the next quarter and a decent beat of analysts’ EPS estimates.
The stock is up 17.4% since reporting and currently trades at $923.11.
This content was originally published on Stock Story
