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Semtech (SMTC) Q1 Earnings and Revenues Surpass Estimates
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Semtech Corporation’s (SMTC - Free Report) fiscal first-quarter 2022 non-GAAP earnings of 53 cents per share beat the Zacks Consensus Estimate by 1.9%. The reported earnings increased 3.9% sequentially and 51.4% year over year.
Net sales of $170.4 million increased 3.5% sequentially and 28.4% from the prior-year quarter. It also surpassed the Zacks Consensus Estimate of $168 million.
The top-line growth was driven by strong momentum across all end-markets served. Further, strong demand in IoT, optical infrastructure and mobile segments drove the results.
Additionally, Semtech’s low power, high range (LoRa) business contributed well to its quarterly performance.
During the fiscal first quarter, shipments in Asia, North America and Europe represented 78%, 13% and 9% of net sales, respectively.
During the first quarter, the company released 11 new products and achieved 3,036 new design wins, up 38% year over year.
Semtech Corporation Price, Consensus and EPS Surprise
Net revenues from the infrastructure market, which represented 36% of its total revenues, increased 1% on a sequential basis and 6% year over year.
Also, revenues from the industrial market increased 1% sequentially and 41% from the year-ago quarter. It represented 32% of total net revenues.
Also, net revenues from the high-end consumer market represented 32% of total revenues. Revenues increased 8% sequentially and 52% year over year.
Revenues by Product Group
Signal Integrity Product Group revenues contributed 39% to total revenues. The reported figure increased 7% sequentially. The increase was driven by strong demand across data center, passive optical networks and wireless base station businesses.
Revenues from its Protection Product Group represented 27% of the total revenues. The figure was down 5% sequentially but up 13% year over year. The decline was driven by supply constraints faced by some smartphone customers. However, demand for protection devices from the broad-based industrial market increased as automotive and IoT markets gained momentum.
Wireless and Sensing Product Group revenues, which contributed 34% to total revenues, increased 7% sequentially and 78% year over year. The increase was driven by record net sales of LoRa platform products.
Operating Results
Non-GAAP gross margin of 62% expanded 70 basis points (bps) year over year, reflecting a higher favorable product mix.
First-quarter adjusted selling, general and administrative expenses increased 9.5% year over year to $31.1 million. Also, product development and engineering expenses increased 33.1% from the year-ago quarter to $33 million.
Non-GAAP operating margin of 24.3% also expanded 310 bps year over year.
Balance Sheet and Cash Flow
Semtech ended the quarter with cash and cash equivalents of $258.2 million compared with $268.9 million in the previous quarter. Account receivables were $66.5 million, down from $70.4 million in the last quarter. Long-term debt was $175.3 million, down from $179.2 million in the previous quarter.
For the quarter, cash flow from operations was $32.6 million, net capital expenditure amounted to $5.8 million and free cash flow totaled $26.8 million.
During the quarter, the company repurchased 360.9 thousand shares for $25 million.
Guidance
For fiscal second-quarter 2022, management expects net sales in the range of $177-$187 million. The Zacks Consensus Estimate for the same is pegged at $174.1 million.
Non-GAAP gross margin is expected within 61.7-62.7%. Also, management projects SG&A expenses within $33-$34 million, and research and development costs in the range of $31-$32 million.
Moreover, management anticipates generating higher revenues from all product groups in the fiscal second quarter.
Non-GAAP earnings per share are expected in the range of 57-65 cents. The Zacks Consensus Estimate for the same is pegged at 58 cents per share.
Zacks Rank & Stocks to Consider
Currently, Semtech carries a Zacks Rank #3 (Hold).
Long-term earnings growth rates for MACOM, Apple and Microchip are currently projected at 37%, 12.5% and 15.3%, respectively.
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Semtech (SMTC) Q1 Earnings and Revenues Surpass Estimates
Semtech Corporation’s (SMTC - Free Report) fiscal first-quarter 2022 non-GAAP earnings of 53 cents per share beat the Zacks Consensus Estimate by 1.9%. The reported earnings increased 3.9% sequentially and 51.4% year over year.
Net sales of $170.4 million increased 3.5% sequentially and 28.4% from the prior-year quarter. It also surpassed the Zacks Consensus Estimate of $168 million.
The top-line growth was driven by strong momentum across all end-markets served. Further, strong demand in IoT, optical infrastructure and mobile segments drove the results.
Additionally, Semtech’s low power, high range (LoRa) business contributed well to its quarterly performance.
During the fiscal first quarter, shipments in Asia, North America and Europe represented 78%, 13% and 9% of net sales, respectively.
During the first quarter, the company released 11 new products and achieved 3,036 new design wins, up 38% year over year.
Semtech Corporation Price, Consensus and EPS Surprise
Semtech Corporation price-consensus-eps-surprise-chart | Semtech Corporation Quote
Revenues by End Market
Net revenues from the infrastructure market, which represented 36% of its total revenues, increased 1% on a sequential basis and 6% year over year.
Also, revenues from the industrial market increased 1% sequentially and 41% from the year-ago quarter. It represented 32% of total net revenues.
Also, net revenues from the high-end consumer market represented 32% of total revenues. Revenues increased 8% sequentially and 52% year over year.
Revenues by Product Group
Signal Integrity Product Group revenues contributed 39% to total revenues. The reported figure increased 7% sequentially. The increase was driven by strong demand across data center, passive optical networks and wireless base station businesses.
Revenues from its Protection Product Group represented 27% of the total revenues. The figure was down 5% sequentially but up 13% year over year. The decline was driven by supply constraints faced by some smartphone customers. However, demand for protection devices from the broad-based industrial market increased as automotive and IoT markets gained momentum.
Wireless and Sensing Product Group revenues, which contributed 34% to total revenues, increased 7% sequentially and 78% year over year. The increase was driven by record net sales of LoRa platform products.
Operating Results
Non-GAAP gross margin of 62% expanded 70 basis points (bps) year over year, reflecting a higher favorable product mix.
First-quarter adjusted selling, general and administrative expenses increased 9.5% year over year to $31.1 million. Also, product development and engineering expenses increased 33.1% from the year-ago quarter to $33 million.
Non-GAAP operating margin of 24.3% also expanded 310 bps year over year.
Balance Sheet and Cash Flow
Semtech ended the quarter with cash and cash equivalents of $258.2 million compared with $268.9 million in the previous quarter. Account receivables were $66.5 million, down from $70.4 million in the last quarter. Long-term debt was $175.3 million, down from $179.2 million in the previous quarter.
For the quarter, cash flow from operations was $32.6 million, net capital expenditure amounted to $5.8 million and free cash flow totaled $26.8 million.
During the quarter, the company repurchased 360.9 thousand shares for $25 million.
Guidance
For fiscal second-quarter 2022, management expects net sales in the range of $177-$187 million. The Zacks Consensus Estimate for the same is pegged at $174.1 million.
Non-GAAP gross margin is expected within 61.7-62.7%. Also, management projects SG&A expenses within $33-$34 million, and research and development costs in the range of $31-$32 million.
Moreover, management anticipates generating higher revenues from all product groups in the fiscal second quarter.
Non-GAAP earnings per share are expected in the range of 57-65 cents. The Zacks Consensus Estimate for the same is pegged at 58 cents per share.
Zacks Rank & Stocks to Consider
Currently, Semtech carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) , Apple Inc. (AAPL - Free Report) and Microchip Technology Incorporated (MCHP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for MACOM, Apple and Microchip are currently projected at 37%, 12.5% and 15.3%, respectively.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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