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Silicon Motion (SIMO) Q3 Earnings & Revenues Top Estimates
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Silicon Motion Technology Corporation (SIMO - Free Report) reported third-quarter 2021 non-GAAP earnings of $1.70 per American Depositary Share (“ADS”), which surpassed the Zacks Consensus Estimate by 4.9%. The bottom line increased 123.7% from the year-ago quarter’s figure and rose 13.3% sequentially.
Net sales (non-GAAP) of $254.2 million beat the Zacks Consensus Estimate by 3.5%. On a year-over-year basis, sales rallied 102% on higher sales of SSD controllers as well as eMMC and UFS controllers. eMMC and UFS controllers are utilized mostly in smartphones and various smart devices, noted the company. Net sales also increased 15% sequentially in the third quarter.
Performance in Detail
Management noted that sales of SSD controllers were flat sequentially.
Revenues from SSD solutions increased 0-5% quarter over quarter. Revenues from eMMC and UFS controllers rose 60-65% sequentially.
In third-quarter 2021, sales of SSD controllers surged 70-75% year over year. Sales of eMMC and UFS controllers increased 305-310% on a year-over-year basis. In the quarter under review, SSD solutions’ sales declined 0-5% year over year.
Silicon Motion Technology Corporation Price, Consensus and EPS Surprise
Non-GAAP gross margin of 50.2% expanded 110 basis points (bps) on a year-over-year basis but contracted 80 bps sequentially.
Non-GAAP operating expenses, as a percentage of revenues, came in at 20.8%, contracting 530 bps year over year and 110 bps sequentially.
Non-GAAP operating margin expanded 640 bps on a year-over-year basis and 20 bps sequentially to 29.4%.
Balance Sheet & Cash Flow
As of Sep 30, 2021, Silicon Motion had cash, cash equivalents, restricted cash and short-term investments of $419.5 million compared with $412.3 million as of Jun 30, 2021.
The company generated $28.7 million cash from operations during the reported quarter compared with $60 million in the previous quarter.
On Oct 26, 2020, the company’s board of directors approved $1.40 per ADS of annual dividend, slated to be paid out in quarterly installments of 35 cents per ADS. On Aug 19, 2021, the company paid out $12.2 million as dividend to shareholders, which marked its fourth installment.
On Oct 25, 2021, Silicon Motion’s board approved a 43% hike in annual dividend to $2.00 per ADS, which is to be paid out in quarterly installments of 50 cents per ADS. The first installment will be paid on Nov 24, 2021.
A Look at Guidance
For fourth-quarter 2021, Silicon Motion expects non-GAAP revenues in the range of $254-$267 million. The Zacks Consensus Estimate is currently pegged at $242.5 million.
Revenues are likely to reflect benefits from strength in design wins with big OEM clients as well as favorable product mix amid tight foundry wafer supply, noted the company. Continued momentum in PC sales triggered by online learning and the work-from-home wave hold promise. Strong PC shipments are expected to benefit the company’s PCIe NVMe SSD controllers.
Non-GAAP gross margin is anticipated in the range of 48.5-50.5%. Non-GAAP operating margin is projected in the range of 28.5-30.5%.
Zacks Rank & Other Stocks to Consider
Currently, Silicon Motion carries a Zacks Rank #2 (Buy).
Image: Bigstock
Silicon Motion (SIMO) Q3 Earnings & Revenues Top Estimates
Silicon Motion Technology Corporation (SIMO - Free Report) reported third-quarter 2021 non-GAAP earnings of $1.70 per American Depositary Share (“ADS”), which surpassed the Zacks Consensus Estimate by 4.9%. The bottom line increased 123.7% from the year-ago quarter’s figure and rose 13.3% sequentially.
Net sales (non-GAAP) of $254.2 million beat the Zacks Consensus Estimate by 3.5%. On a year-over-year basis, sales rallied 102% on higher sales of SSD controllers as well as eMMC and UFS controllers. eMMC and UFS controllers are utilized mostly in smartphones and various smart devices, noted the company. Net sales also increased 15% sequentially in the third quarter.
Performance in Detail
Management noted that sales of SSD controllers were flat sequentially.
Revenues from SSD solutions increased 0-5% quarter over quarter. Revenues from eMMC and UFS controllers rose 60-65% sequentially.
In third-quarter 2021, sales of SSD controllers surged 70-75% year over year. Sales of eMMC and UFS controllers increased 305-310% on a year-over-year basis. In the quarter under review, SSD solutions’ sales declined 0-5% year over year.
Silicon Motion Technology Corporation Price, Consensus and EPS Surprise
Silicon Motion Technology Corporation price-consensus-eps-surprise-chart | Silicon Motion Technology Corporation Quote
Margins
Non-GAAP gross margin of 50.2% expanded 110 basis points (bps) on a year-over-year basis but contracted 80 bps sequentially.
Non-GAAP operating expenses, as a percentage of revenues, came in at 20.8%, contracting 530 bps year over year and 110 bps sequentially.
Non-GAAP operating margin expanded 640 bps on a year-over-year basis and 20 bps sequentially to 29.4%.
Balance Sheet & Cash Flow
As of Sep 30, 2021, Silicon Motion had cash, cash equivalents, restricted cash and short-term investments of $419.5 million compared with $412.3 million as of Jun 30, 2021.
The company generated $28.7 million cash from operations during the reported quarter compared with $60 million in the previous quarter.
On Oct 26, 2020, the company’s board of directors approved $1.40 per ADS of annual dividend, slated to be paid out in quarterly installments of 35 cents per ADS. On Aug 19, 2021, the company paid out $12.2 million as dividend to shareholders, which marked its fourth installment.
On Oct 25, 2021, Silicon Motion’s board approved a 43% hike in annual dividend to $2.00 per ADS, which is to be paid out in quarterly installments of 50 cents per ADS. The first installment will be paid on Nov 24, 2021.
A Look at Guidance
For fourth-quarter 2021, Silicon Motion expects non-GAAP revenues in the range of $254-$267 million. The Zacks Consensus Estimate is currently pegged at $242.5 million.
Revenues are likely to reflect benefits from strength in design wins with big OEM clients as well as favorable product mix amid tight foundry wafer supply, noted the company. Continued momentum in PC sales triggered by online learning and the work-from-home wave hold promise. Strong PC shipments are expected to benefit the company’s PCIe NVMe SSD controllers.
Non-GAAP gross margin is anticipated in the range of 48.5-50.5%. Non-GAAP operating margin is projected in the range of 28.5-30.5%.
Zacks Rank & Other Stocks to Consider
Currently, Silicon Motion carries a Zacks Rank #2 (Buy).
Some better-ranked stocks in the broader technology sector worth considering are Salesforce (CRM - Free Report) , HP Inc (HPQ - Free Report) and Jabil (JBL - Free Report) . All stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Salesforce, HP Inc and Jabil is currently pegged at 16.8%, 12.7% and 12%, respectively.