In addition to reporting Q3 revenue largely in-line with the guidance provided in the company's Oct. 4 warning, Silicon Motion (SIMO +6.4%) is guiding for Q4 revenue to drop 6%-12% Q/Q; that's much worse than a consensus for a 1% increase. But with shares having already been pressured this year by bad earnings news and many mobile chip peers also providing soft Q4 guidance, investors are taking the guidance in stride.
At the same time, SIMO's $0.09/share Q3 EPS beat seems to be going over well. A $1.9M Q/Q drop in opex to $14.9M contributed to the beat, as did a 40 bps increase in gross margin to 48.8%. SIMO expects opex to rise to $16M-$18M in Q4, and GM to be in a range of 47%-49%.
The chipmaker's mobile storage sales (inc. controller chips and flash cards/drives) rose 4% Q/Q to $48.4M, while its mobile IC sales plunged 27% to just $6.4M thanks to lower 4G transceiver orders from Samsung.
Flash controller sales, and particularly sales of eMMC controllers, continue to be SIMO's strongest product category. They rose 10% Q/Q in Q3, and are up 110% Y/Y over the first 9 months of 2013. SIMO expects to have a 15%-20% eMMC controller share for 2013.