Stock Story
Published Apr 29, 2024 04:05PM ET
Updated Apr 29, 2024 04:31PM ET
No Surprises In Lattice Semiconductor's (NASDAQ:LSCC) Q1 Sales Numbers But Quarterly Guidance Underwhelms
Semiconductor designer Lattice (OTC:LTTC) Semiconductor (NASDAQ:LSCC) reported results in line with analysts' expectations in Q1 CY2024, with revenue down 23.6% year on year to $140.8 million. On the other hand, next quarter's revenue guidance of $130 million was less impressive, coming in 7.5% below analysts' estimates. It made a non-GAAP profit of $0.29 per share, down from its profit of $0.51 per share in the same quarter last year.
Is now the time to buy Lattice Semiconductor? Find out by reading the original article on StockStory, it's free.
Lattice Semiconductor (LSCC) Q1 CY2024 Highlights:
A global leader in its category, Lattice Semiconductor (NASDAQ:LSCC) is a semiconductor designer specializing in customer-programmable chips that enhance CPU performance for intensive tasks such as machine learning.
Processors and Graphics ChipsThe biggest demand drivers for processors (CPUs) and graphics chips at the moment are secular trends related to 5G and Internet of Things, autonomous driving, and high performance computing in the data center space, specifically around AI and machine learning. Like all semiconductor companies, digital chip makers exhibit a degree of cyclicality, driven by supply and demand imbalances and exposure to PC and Smartphone product cycles.
Sales GrowthLattice Semiconductor's revenue growth over the last three years has been solid, averaging 18.6% annually. But as you can see below, its revenue declined from $184.3 million in the same quarter last year to $140.8 million. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy).
This was a slow quarter for the company as its revenue dropped 23.6% year on year, in line with analysts' estimates. This could mean that the current downcycle is deepening.
Lattice Semiconductor's revenue growth has decelerated over the last three quarters and its management team projects revenue to fall next quarter. As such, the company is guiding for a 31.6% year-on-year revenue decline while analysts are expecting a 6.5% drop over the next 12 months.
Product Demand & Outstanding InventoryDays Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business' capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Lattice Semiconductor's DIO came in at 195, which is 50 days above its five-year average, suggesting that the company's inventory has grown to higher levels than we've seen in the past.
Key Takeaways from Lattice Semiconductor's Q1 Results It was good to see Lattice Semiconductor beat analysts' EPS expectations this quarter. On the other hand, its revenue and implied operating profit guidance for next quarter missed analysts' expectations and its operating margin shrunk. Overall, this was a mixed quarter for Lattice Semiconductor. The company is down 2.6% on the results and currently trades at $74.9 per share.
Written By: Stock Story
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.