Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Semtech (NASDAQ:SMTC), and the best and worst performers in the semiconductor manufacturing group.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers and data storage. The growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 3.16%, while on average next quarter revenue guidance was 1.49% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again, but semiconductor manufacturing stocks held their ground better than others, with the share prices up 19% since the previous earnings results, on average.
Operating for more than 60 years, Semtech (NASDAQ:SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and Cloud connectivity.
Semtech reported revenues of $236.5 million, up 17% year on year, in line with analyst expectations. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in operating margin. In addition, the company announced Paul Pickle as the new President and Chief Executive Officer. The market responded positively to the news of the new leadership, as reflected in the positive sentiment after the earnings announcements.
The stock is up 8.11% since the results and currently trades at $24.26.
Best Q1: Photronics (NASDAQ:PLAB)
Sporting a global footprint of facilities, Photronics (NASDAQ:PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Photronics reported revenues of $229.3 million, up 12.1% year on year, beating analyst expectations by 8.68%. It was an exceptional quarter for the company, with a significant improvement in gross margin and strong revenue guidance for the next quarter.
Photronics scored the strongest analyst estimates beat among its peers. The stock is up 40.5% since the results and currently trades at $24.2.
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Weakest Q1: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of most of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers that are used for cutting, welding and processing raw materials.
IPG Photonics reported revenues of $347.2 million, down 6.16% year on year, beating analyst expectations by 5.01%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and increased inventory levels.
The stock is up 7.14% since the results and currently trades at $126.45.
With most major chip manufacturers as customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technology and devices.
Teradyne reported revenues of $617.5 million, down 18.2% year on year, beating analyst expectations by 2.4%. It was a mixed quarter for the company, with a beat on the bottom line but a decline in operating margin.
The stock is up 15.6% since the results and currently trades at $107.8.
Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.63 billion, up 6.16% year on year, beating analyst expectations by 4.07%. It was a strong quarter for the company, with a beat on the bottom line and solid revenue guidance for the next quarter.
The stock is up 6.11% since the results and currently trades at $137.91.
The author has no position in any of the stocks mentioned