Semiconductor Stocks Can’t Catch A Break, Analyst Says

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Semiconductor stocks moving on earnings news Friday included Microchip Technology (MCHP), Power Integrations (POWI), Skyworks Solutions (SWKS) and Synaptics (SYNA). But despite beat-and-raise reports, most chip stocks have faltered this earnings season.




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“Semis cannot catch a break,” said Jordan Klein, managing director for tech, media and telecom sector trading at Mizuho Securities. “Sentiment (is) worsening for analog, cyclical and wireless” semiconductor stocks, he said in a note to clients Friday.

Only Advanced Micro Devices (AMD) seems to be holding on to its post-earnings gains, Klein said.

“The prevailing buyside sentiment or mentality seems to be ‘why buy this sector when beats and raises fail to take stocks higher, and anything just in-line gets slammed?'” he said.

Latest Semiconductor Stocks Posting Results

Earnings reports late Thursday from Microchip, Power Integrations, Skyworks and Synaptics failed to excite investors.

In morning trades on the stock market today, Microchip stock sank 3.3%, near 71.70. Power Integrations rose 0.6%, near 79.55. Skyworks crumbled 5.2%, near 131.30. And Synaptics dipped a fraction, near 204.

Of those semiconductor stocks, Power Integrations and Synaptics delivered the most upside to analyst estimates.

San Jose, Calif.-based Power Integrations earned an adjusted 83 cents a share on sales of $172.7 million in the fourth quarter. Analysts were looking for earnings of 75 cents a share on sales of $170.2 million. Earnings climbed 38% year over year while sales advanced 15%.

For the first quarter, Power Integrations guided to sales of $180 million, topping analyst estimates for $172.8 million.

San Jose, Calif.-based Synaptics earned an adjusted $3.26 a share on sales of $420.5 million in its fiscal second quarter ended Dec. 25. Analysts had expected earnings of $3.10 a share on sales of $405 million. On a year-over-year basis, earnings rose 42% while sales climbed 18%.

For the current quarter, Synaptics forecast sales of $450 million to $480 million. The midpoint of $465 million would represent year-over-year growth of 43%. Wall Street had predicted revenue of $383 million.

Microchip, Skyworks Deliver Modest Beats

Two semiconductor stocks posted modest quarterly beats on Thursday: Microchip and Skyworks.

Chandler, Ariz.-based Microchip earned an adjusted $1.20 a share on sales of $1.76 billion in its fiscal third quarter ended Dec. 31. Wall Street was looking for earnings of $1.17 a share on sales of $1.75 billion. Microchip earnings jumped 48% from the year-earlier period while sales increased 30%.

For the March quarter, Microchip predicted adjusted earnings of $1.25 a share on sales of $1.82 billion. That’s based on the midpoint of its outlook. Analysts were targeting earnings of $1.20 a share on sales of $1.78 billion.

Irvine, Calif.-based Skyworks earned an adjusted $3.14 a share on revenue of $1.51 billion in its fiscal first quarter ended Dec. 31. Wall Street was targeting earnings of $3.11 a share on sales of $1.5 billion. On a year-over-year basis, Skyworks earnings slipped 7% while sales were flat.

For the current quarter, Skyworks forecast adjusted earnings of $2.62 a share on sales of $1.33 billion. That compares with analyst estimates of $2.60 in per-share earnings and $1.33 billion in sales.

The Philadelphia semiconductor index, known as SOX, is down about 14% so far in 2022. The index includes 30 semiconductor stocks. In morning trading on Friday, the SOX slid 0.7%.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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