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Fri, Jan. 29, 3:27 PM
- Several Apple suppliers are seeing major gains after iPhone power amplifier supplier Skyworks (SWKS +5.5%) and iPhone LCD driver IC supplier Synaptics (SYNA +10.6%) delivered their calendar Q4 reports yesterday afternoon - Skyworks beat estimates, while Synaptics (initially lower) missed on sales and beat on EPS.
- Both companies provided soft Q1 guidance (I, II) - Synaptics also suggested it's seeing weakness at multiple top smartphone OEMs . But with nearly every other iPhone supplier to have reported (not to mention Apple itself) having also guided light, shares are rallying nonetheless.
- Big gainers include mobile DRAM supplier Micron (MU +11.1%), microphone supplier Knowles (KN +11.2%), motion sensor supplier InvenSense (INVN +7.5%), audio codec chip supplier Cirrus Logic (CRUS +6.6%), NFC chip/motion co-processor supplier NXP (NXPI +5.9%), and RF chip suppliers/Skyworks rivals Qorvo (QRVO +6.8%) and Avago (AVGO +5.6%). The Nasdaq is up 1.8%.
- Micron could also be getting a lift from the market-pleasing reports delivered by hard drive giants Seagate and Western Digital, given Micron is exposed to many of the same end-markets as Seagate/Western.
Cirrus Logic is adding to the big Thursday gains seen after the company provided encouraging FY17 comments in its FQ3 earnings call. InvenSense has more than recovered the Thursday losses seen after the company provided soft FQ4 guidance and suggested it had lost share at Samsung.
- Possibly helping Synaptics out: When asked about M&A reports on the earnings call, CEO Rick Bergman didn't quite shoot them down. "[W]e're not going to comment on rumors or market speculation ... at the end of the day it is our job to maximize shareholder value so we'll listen to any great ideas that can do that and evaluate them appropriately."
Meanwhile, Bergman asserted Synaptics' TDDI (integrated touch controller/display driver) sales are due to ramp strongly thanks to numerous design wins at top LCD panel makers, and that its ClearForce pressure-response tech will be "a significant differentiator" for Synaptics' TDDI offerings.
Thu, Jan. 28, 5:21 PM
- Skyworks (NASDAQ:SWKS) FQ1 beat is accompanied by guidance for FQ2 revenue of $775M and EPS of $1.24, below a consensus of $817.8M and $1.33. However, with Apple having issued light calendar Q1 guidance and many fellow iPhone suppliers (including rival Qorvo) having warned and/or issued soft guidance, the outlook is being taken in stride.
- FQ1 details: Margin gains continue boosting EPS: Non-GAAP gross margin rose 470 bps Y/Y to 51.4%. FQ2 GM guidance is at 50.5%-51%. GAAP operating expenses rose 12% Y/Y to $141.6M. Skyworks ended FQ1 with over $1.2B in cash and no debt.
New non-mobile design wins included Volkswagen telematics systems, GM vehicle-to-vehicle communications sockets, Google's Chromecast HDMI stick and Nest security cameras, and Roku set-tops.
- Qorvo (NASDAQ:QRVO) is up 2.3% after hours. Avago (NASDAQ:AVGO) is up 1.3%.
- Skyworks' FQ1 results, earnings release
Wed, Jan. 27, 10:24 AM
- Along with its Q4 results, Q1 guidance, and restructuring plans, STMicroelectronics (STM +4%) says it's cutting 1,400 jobs - 430 in France through a voluntary departure plan, 670 in Asia, and 120 in the U.S. The company expects $170M/year in savings and $170M in restructuring costs.
- Along with the job cuts, STMicro says it's discontinuing "the development of new platforms and standard products" for its set-top and home gateway IC lines. 600 employees will be redployed from the company's set-top chip ops to "support principally ST's growth ambitions in digital automotive and microcontrollers."
- STMicro: "The slower than expected market adoption of leading-edge products and increasing competition on low-end [set-top] boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years." Broadcom (BRCM -0.1%), which is due to officially be acquired by Avago (AVGO -3.1%) on Feb. 1, has been STMicro's top rival in the set-top/home gateway IC space, and stands to benefit from STMicro's move.
- The French government has responded to the news by stating STMicro needs a new strategy. Spokesman Stephane Le Foll: "We want a new strategy put in place to allow this company to create value and recover."
- STMicro continues trading higher post-earnings. Avago is joining other iPhone/iPad suppliers in selling off following Apple's earnings/guidance. the Nasdaq is down 1.2%.
Wed, Jan. 13, 10:09 AM
- Qualcomm (QCOM +1.9%) is forming a 51/49 JV with Japanese electronic component maker TDK (OTCPK:TTDKY) to be known as RF360 Holdings. The JV is declared to pair TDK's RF filter/module expertise with Qualcomm's RF front-end solutions, and will create filters and front-end modules for mobile devices, IoT hardware, drones, robots, and other end-markets.
- Deal terms: The deal is expected to close by early 2017, and is estimated to have an "aggregate transaction value" of $3B. Qualcomm says its up-front capital investment will total $1.2B, and forecasts the JV will be accretive to EPS in the 12 months following closing. It has the option to buy TDK's interest in the JV 30 months after closing. Qualcomm will also buy "certain assets" from TDK, and partner with the company in areas such as sensors and wireless charging.
- Qualcomm: "RF360 Holdings will have a comprehensive set of filters and filter technologies, including surface acoustic wave (SAW), temperature-compensated surface acoustic wave (TC-SAW) and bulk acoustic wave (BAW) to support the wide range of frequency bands being deployed in networks across the globe. Moreover, RF360 Holdings will enable the delivery of [RF front-end] modules that will include front-end components designed and developed by [Qualcomm]. These components include CMOS, SOI and GaAS Power Amplifiers, a broad portfolio of Switches enhanced via a recent acquisition, Antenna Tuning and the industry's leading Envelope Tracking solution."
- In presentation slides (.pdf), Qualcomm notes the RF front-end market is expected to see a 13% CAGR from 2015-2020 (per Mobile Experts), eventually reaching a size of $18B (aided by growing mobile RF complexity and filter needs). The company adds the businesses being transferred to the JV by Qualcomm and TDK have a revenue run rate approaching $1B/year.
- Qualcomm is higher following the news, while RF chip/module maker Qorvo (QRVO -7.8%) is off sharply. Qorvo rivals Skyworks (SWKS -2%) and Avago (AVGO -1%) are seeing moderate losses. The group also sold off when Qualcomm first unveiled its RF360 front-end module in 2013.
Thu, Jan. 7, 5:38 PM
Thu, Jan. 7, 4:22 PM
- Qorvo and Cirrus Logic have both issued calendar Q4 warnings after the bell, and indicated calendar Q1 sales will also be soft. The warnings come in the wake of reports indicating Apple has cut iPhone production and component orders.
- Fellow iPhone suppliers are selling off in response. Skyworks (NASDAQ:SWKS) -4% after hours. Avago (NASDAQ:AVGO) -4.3%. NXP (NASDAQ:NXPI) -1.6%. InvenSense (NYSE:INVN) -2.5%. Broadcom (BRCM - set to be acquired by Avago) -1.3%. Synaptics (NASDAQ:SYNA) -1.7%. Jabil (NYSE:JBL) -0.7%.
- Many of the aforementioned names had already seen steep losses in regular trading, as the Nasdaq fell 3% amid a broad market selloff.
Tue, Jan. 5, 12:32 PM
- Citing several parts suppliers, Japan's Nikkei reports Apple (AAPL -2.1%) is "expected to reduce output of the iPhone 6s and 6s Plus by around 30% in the January-March quarter compared with its original plans."
- The paper adds Apple initially told component suppliers to keep production even with that seen for the iPhone 6/6+ a year ago, but has seen 6S/6S+ inventories pile up "at retailers in markets ranging from China and Japan to Europe and the U.S."
- In December, Apple sold off after long-time bull Morgan Stanley forecast (in response to checks) iPhone unit sales will drop 6% in FY16 (ends in September), and added to its losses after Dialog Semi (gets over half its sales from Apple) issued a Q4 warning. In November, Credit Suisse reported of component order cuts.
- Apple is trading near $103 following the Nikkei's report. Suppliers Cirrus Logic (CRUS -4.6%), Skyworks (SWKS -5.2%), Qorvo (QRVO -4.8%), Avago (AVGO -1.9%), and InvenSense (INVN -2.7%) are also under pressure.
- Update: Morgan Stanley reacts to the Nikkei's report by noting a 30% production cut is more than the ~20% it was modeling. (source: Notable Calls)
Dec. 21, 2015, 9:37 AM
- Forecasting strong EPS growth following the closing of the Broadcom deal, RBC's Amit Daryanani has added Avago (AVGO +1.6) to his firm's Top Pick list, and hiked his target by $15 to $170.
- Daryanani: "Our bullish bias is predicated on our belief that AVGO will expand EPS from $9.24 in CY15E to [more than] $16.00 by CY18E driven by multiple levers – BRCM integration, asset divestures, RF ramp-up, cost containment and potential deleveraging ... we estimate [less than 30%] of future EPS growth is predicated on organic revenue dynamics and 70%+ is driven by AVGO’s ability to curtail costs, optimize the portfolio, and further deleveraging."
- He forecasts $6B/year in free cash flow by 2018, which in turn is expected to provide Avago with ample liquidity to deleverage or make more acquisitions. "While we are cognizant that the markets (and semiconductors specifically) are observing softer demand trends, in our view AVGO has the potential to offset soft demand trends via self-help levers at its disposal."
- Shares are three weeks removed from jumping in response to an FQ4 EPS beat (driven by margin strength) and better-than-feared FQ1 guidance.
Dec. 15, 2015, 8:17 AM
- Dialog Semiconductor (OTC:DLGNF) is lower by 6.8% in European action after cutting its Q4 revenue outlook to $390M-$400M vs. the previous $430M-$460M.
- Even with the market getting incrementally cautious on Apple (NASDAQ:AAPL) volumes, says Barclays (h/t Notable Calls), this warning is worse and earlier than any have so far forecast. Skyworks (NASDAQ:SWKS) and Avago (NASDAQ:AVGO) could be next.
- Deutsche weighs in as well, saying the warning confirms fears about iPhone 6S sell-through. Even lowered Street estimates for Q1 could prove optimistic.
- AAPL -1.1%, SWKS -1.9%, AVGO -1.1% premarket
Dec. 3, 2015, 9:15 AM
Dec. 2, 2015, 5:40 PM
Dec. 2, 2015, 5:02 PM
- Avago (NASDAQ:AVGO) has jumped to $142.24 after hours after beating FQ4 EPS estimates, posting in-line revenue, and issuing FQ1 sales guidance that was below consensus but better than feared in light of soft guidance from other chipmakers and reports of Apple component order cuts. Merger partner Broadcom (NASDAQ:BRCM) has risen to $57.47.
- Financials: Lifting FQ4 EPS: Gross margin (non-GAAP) was 62%, up from 61% in FQ3 and 58% a year ago, and above a guidance midpoint of 60.5%. FQ1 GM guidance is at 61% (+/- 1%). Operating expenses rose 12% Y/Y to $338M, slightly topping guidance of $336M. Avago ended FQ4 with $1.82B in cash, and $3.9B in debt.
- Top-line performance: Wireless communications chip sales (37% of revenue, driven in FQ4 by iPhone orders) rose 10% Q/Q and 8% Y/Y. Enterprise storage (LSI/Emulex, 35% of revenue) rose 9% Q/Q and 38% Y/Y; the Emulex purchase boosted Y/Y growth. Wired infrastructure (optical components, 20% of revenue) rose 2% Q/Q and 7% Y/Y. Industrial/other (8% of revenue, hurt by inventory correction) fell 10% Q/Q and 7% Y/Y.
- Avago's results/guidance, PR
Dec. 2, 2015, 4:05 PM
Nov. 10, 2015, 8:32 AM| Nov. 10, 2015, 8:32 AM | 16 Comments
Nov. 5, 2015, 4:32 PM
- Avago (NASDAQ:AVGO) has risen to $124.00 after hours after Skyworks provided strong FQ1 guidance to go with FQ4 results that nearly matched its October outlook, and beaten-down Qorvo beat FQ2 estimates and offered mixed FQ3 guidance (below-consensus revenue, in-line EPS).
- Avago's FQ4 (October quarter) report typically arrives later this month.
Oct. 29, 2015, 12:29 PM
- Down on Monday following Dialog Semi's Q3 report and up yesterday in the wake of Apple's results/guidance, chip stocks are selling off again (SOXX -2.5%) after leading microcontroller vendor NXP (NXPI -18.2%) posted mixed Q3 results and (more importantly) guided for Q4 revenue to be down by a "low to upper-teens" % Q/Q. The Nasdaq is down 0.3%.
- Also: 1) NXP rival and fellow European chipmaker STMicroelectronics (STM -5.8%) slightly missed Q3 revenue estimates and has guided for Q4 revenue to be down 6% (+/- 3.5%) Q/Q. 2) Network processor vendor Cavium (CAVM -5%) issued light Q4 guidance, while blaming a distribution model change at its biggest data center customer. 3) Microcontroller maker Atmel (ATML -2.4%, set to be acquired by Dialog) missed Q3 revenue estimates and guided for Q4 revenue of $266M-$286M, below a $296.1M consensus.
- On the bright side, Apple-dependent Cirrus Logic (CRUS -5.7%) beat FQ2 EPS estimates (revenue was in-line) and provided solid FQ3 guidance, and fellow Apple/Samsung supplier InvenSense (INVN +14.3%) beat FQ2 estimates and issued in-line FQ3 guidance. Cirrus is nonetheless selling off; the earnings call (transcript) was generally upbeat, with management talking up FY16/FY17 growth opportunities related to smart codec and boosted amplifier sales.
- NXP merger partner Freescale (FSL -15.4%) is naturally seeing big losses. Other decliners include RF chipmakers Skyworks (SWKS -3.1%), Avago (AVGO -6%), and Qorvo (QRVO -2.6%), analog/mixed-signal chipmakers Texas Instruments (TXN -3%), ON Semi (ON -5.9%), MagnaChip (MX -6.8%), Fairchild (FCS -4.3%), Maxim (MXIM -3.1%), and IDT (IDTI -5.2%), and smart TV SoC vendor/STMicro rival Sigma Designs (SIGM -3.2%).
- Like NXP, Cirrus, and InvenSense, Skyworks, Avago, Qorvo, TI, and Fairchild are Apple suppliers. Fairchild and Maxim have recently benefited from M&A reports (I, II).
- Both NXP and STMicro reported seeing conditions deteriorate as Q3 progressed. NXP added lower-than-expected chip sell-through led to higher channel inventories, and STMicro stated "lower consumer spending in China is impacting the dynamics of the distribution channel in the region and the industry more globally, particularly in automotive." NXP has added 20M shares to its buyback in an attempt to soften the blow.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Broadcom Ltd is engaged in designing, developing and supplying analog & digital semiconductor connectivity solutions. Its product portfolio serves four end markets wired infrastructure, wireless communications, enterprise storage and industrial & other.
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