Silicon Motion (SIMO) Q1 Earnings Top, Revenues Lag Estimates
Zacks Investment Research | Apr 30, 2018 12:08AM ET
Silicon Motion Technology Corporation (NASDAQ:SIMO) delivered first-quarter 2018 non-GAAP earnings of 71 cents per American Depositary Share ("ADS"), which surpassed the Zacks Consensus Estimate of 65 cents and came a penny ahead of the year-ago quarter figure. However, earnings declined 10.1% sequentially.
Net sales increased 2% year over year but decreased 4% from the previous quarter to $130.3 million. The figure missed the Zacks Consensus Estimate of $131 million as well. However, the figure was marginally higher than the mid-point of management’s guided range of $127-$132 million (mid-point $129.5 million).
We believe improving supply of 64-layer 3D NAND is bringing down high NAND prices, which is eventually benefiting Silicon Motion.
Additionally, as the company’s Open-Channel NVMe SSD controller enters into production, Client SSD Controller sales are anticipated to increase.
Revenue Details
Sales from mobile storage products (which include Embedded Storage as well as Expandable Storage products) increased 4% year over year but decreased 3% sequentially to $121.4 million. Revenues from mobile storage products contributed 93% to overall product revenues.
Sales of Shannon hyper-scale SSDs and Ferri industrial SSDs were down sequentially, owing to seasonality. Reduction in SSD prices due to rebounding orders from the company’s NAND flash partners and increase in NAND supply led to higher revenues.
Sales for Client SSD controllers grew 10% quarter over quarter.
Revenues from eMMC controllers increased 15% sequentially. The increase can be attributed to the rebuilt inventory from its NAND flash partners.
Embedded Storage1 sales (approximately 85% of total revenues) declined 1% sequentially. Revenues from SSD solutions declined 25% sequentially.
Mobile communications product (which include mobile TV SoCs) sales were $7.9 million, down 16% sequentially, and represented 6% of total revenues.
Other products formed 1% of the revenues and generated $1.1 million.
Operational Details
Non-GAAP gross margin declined 300 basis points (bps) on a year-over-year basis. However, non-GAAP gross margin increased 140 bps sequentially to 48.0%. The sequential increase can be attributed to growth in gross margin from the company’s controllers and SSD solutions.
Silicon Motion Technology Corporation Price, Consensus and EPS Surprise
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