MACOM (MTSI) Earnings & Revenues Surpass Estimates In Q1
Zacks Investment Research | Jan 29, 2020 09:20PM ET
MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) reported fiscal first-quarter 2020 non-GAAP earnings of 7 cents per share, beating the Zacks Consensus Estimate by 133.3%. The figure improved significantly from earnings of 1 cent per share in the prior quarter.
However, the bottom line decreased 65% year over year.
Revenues of $119.1 million surpassed the Zacks Consensus Estimate by 3.5%. Notably, the figure surged 6.1% sequentially but declined 21% from the year-ago quarter.
The suspension of shipments to Huawei, which resulted in reduction in MACOM’s sales to Huawei, remained a major concern during the reported quarter.
Nevertheless, the company witnessed sequential improvement in all the key end-markets in the fiscal first quarter.
Following improved guidance for the fiscal second quarter, shares of the company have surged 16.9%.
Further, MACOM has returned 70.4% over a year, outperforming the MACOM Technology Solutions Holdings, Inc. Quote
Balance Sheet & Cash Flow
As of Jan 3, 2020, cash equivalents and short-term investments were $210.1 million, up from $176.7 million as of Sep 27, 2019. Inventories were $106.9 million, down from $107.9 million a year ago.
Long-term debt obligations, excluding current portion, were $654.5 million in the fiscal first quarter compared with $655.3 million in the previous quarter.
Cash generated from operations was $37.7 million compared with $7.6 million of cash utilized in operations in the last quarter.
Further, the company’s free cash flow in the reported quarter came in $33.4 million compared with ($13.6) million in the previous quarter.
Guidance
For fiscal second-quarter 2020, MACOM expects revenues between $122 million and $126 million. The Zacks Consensus Estimate for revenues is pegged at $117.3 million.
MACOM expects telecom and data center markets to show improvements while industrial and defense market is expected to be flat.
Further, the company’s adjusted earnings per share is anticipated to lie in a range of 9 cents to 13 cents. The Zacks Consensus Estimate for earnings is pegged at 6 cents per share.
Moreover, non-GAAP gross margin is anticipated to lie within the range of 53-55%.
Zacks Rank & Key Picks
MACOM currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Itron, Inc. (NASDAQ:ITRI) , NetEase, Inc. (NASDAQ:NTES) and Five9, Inc. (NASDAQ:FIVN) . While Itron sports a Zacks Rank #1 (Strong Buy), NetEase and Five9 carry a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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