Looking back on analog semiconductors stocks' Q3 earnings, we examine this quarter's best and worst performers, including Himax (NASDAQ:HIMX) and its peers.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a weak Q3; on average, revenues were in line with analyst consensus estimates while next quarter's revenue guidance was 8% below consensus. Stocks have faced challenges as investors prioritize near-term cash flows, but analog semiconductors stocks held their ground better than others, with the share prices up 13.7% on average since the previous earnings results.
Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Himax reported revenues of $238.5 million, up 11.6% year on year, topping analyst expectations by 3.9%. It was a weak quarter for the company, with a decline in its operating margin.
“Ongoing macro headwinds are limiting our visibility as panel customers remain tentative about demand prospects, leading to shortened forecasts and more frequent last-minute orders. Having said that, our longer-term outlook for the automotive business, our largest revenue contributor, remains positive, as we maintain a dominant position in the sector. The majority of our design-wins in TDDI and local dimming Tcon, both relatively new technologies for automotive sector, are slated to commence mass production during the next two years, thereby further fortifying our market share leadership amidst growing competition,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax.
Himax scored the biggest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 13.2% since the results and currently trades at $6.25.
Best Q3: Monolithic Power Systems (NASDAQ:MPWR)
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Monolithic Power Systems reported revenues of $474.9 million, down 4.1% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a significant improvement in its inventory levels but a decline in its gross margin.
The stock is up 45.9% since the results and currently trades at $589.
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Weakest Q3: Power Integrations (NASDAQ:POWI)
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Power Integrations reported revenues of $125.5 million, down 21.7% year on year, falling short of analyst expectations by 3.7%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
Power Integrations had the slowest revenue growth in the group. The stock is up 2.2% since the results and currently trades at $76.89.
Universal Display (NASDAQ:OLED)
Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.
Universal Display reported revenues of $141.1 million, down 12.1% year on year, falling short of analyst expectations by 5.3%. It was a weak quarter for the company, with a miss of analysts' revenue estimates and full-year revenue guidance missing analysts' expectations.
Universal Display had the weakest performance against analyst estimates among its peers. The stock is up 24.7% since the results and currently trades at $177.22.
NXP Semiconductors (NASDAQ:NXPI)
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
NXP Semiconductors reported revenues of $3.43 billion, down 0.3% year on year, in line with analyst expectations. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter but guidance for adjusted operating profit and adjusted EPS were roughly in line.
The stock is up 13.7% since the results and currently trades at $208.5.
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The author has no position in any of the stocks mentioned