SAN JOSE, Calif. - It's earnings season and a plethora of IC companies reported their results. Here's what analysts said about some of the players:
Arm Holdings plc
Gary Mobley, an analyst with Benchmark, said: ''ARM reported Q2 FY10 revenue of $150.3 million and non-GAAP EPS of $0.10. However, ARM did benefit from a $9 million benefit from a one-time royalty catch up. Prior to being audited by ARM, a major licensee discovered that it had underpaid royalties by $9 million. Without the royalty catch-up payment, ARM would have reported Q2 revenue of $141.3 million and non-GAAP EPS of $0.08, in-line with consensus.
During Q2 FY10, ARM did experience record bookings, which helped drive a 20 percent sequential increase in backlog. Backlog for ARM typically represents 45 percent to 50 percent of forward-12-month revenue. Accordingly, based on management FY10 guidance, the company should experience better-than-normal license revenue coverage during 2H FY10. Management was not more positive regarding 2H FY10 revenue estimates due to fears that 2H royalties could experience sub-seasonal patterns''.
Mark McKechnie, an analyst with Gleacher & Co., said: ''BRCM reported a $0.04 beat for June on in-line sales but lower operating expenses. September guidance for sales up 9 percent at the mid-point beat the Street's up 5 percent q/q. We have raised our forecast for CY10 and CY11 based on a broad cyclical recovery with secular growth driven by handsets.''
Cavium Networks Inc.
Gary Mobley, an analyst with Benchmark, said: ''Second-quarter revenue of $49.9 million was approximately 2 percent above consensus and at the high end of managementís $48-$50 million guidance. Managementís Q3 FY10 guidance calls for revenue to range between $54 million to $55 million, which compares to prior consensus of $52.3 million and our estimate of $53.2 million.''
First Solar Inc.
Edwin Mok, an analyst with Needham & Co. LLC, said: ''FSLR executed well in 2Q10 and reported strong results. The company raised its full year earnings guidance, but lowered its 2010 revenue outlook, which probably disappointed the Street given the high expectations going into the report, in our view. We believe the results suggest FSLR reduced price in 2Q10 and will lower prices further in 2H10, despite a firm spot price for competitive c-Si modules. We believe a lower rate of cost reductions coupled with price declines will continue to pressure margins in 2H10 and 2011.''
Vernon Essi, an analyst at Needham & Co. LLC, said: ''Ixyx reported June Q1 revenue of $85 million and EPS of $0.21, materially above the consensus and our revenue of $81 million and our EPS of $0.14. Revenue guidance of relatively flat Q/Q at $85 million is slightly above our estimate of $83 million. The challenge for Ixys is to meet its customer requirements in this very tight supply chain environment on its record backlog.''
C.J. Muse, an analyst with Barclays Capital, said: 'In step with our positive preview, KLAC offered a solid beat and raise led by orders that have held up surprisingly well even in seasonally weak September quarter, with implied guide for an up December quarter.''
Lam Research Corp.
Edwin Mok, an analyst with Needham & Co. LLC, said: ''LRCX reported strong F4Q10 (Jun) results and provided substantially higher guidance. We believe the strong C2H10 outlook suggests the company is gaining share in both etch and clean markets. However, talks of push-outs and growing market concerns over chip demand will likely limit share price in the near-term.
June Q shipments of $694 milllion were slightly below guidance of $710 million due to push-outs at 4 customers, which totaled $25-30 million. LRCX explained that customers had some logistic issues and faced supply chain constraints, but we are worried that customers may be slowing tool delivery. In addition, part of the strong September Q shipment guidance of $810 million includes this push-out, suggesting that the Q/Q growth in DecQ should moderate.''
Maxim Integrated Products Inc.
Craig Berger, an analyst with FBR, said: ''Maxim reported robust calendar 2Q results and guided calendar 3Q revenues and earnings solidly above consensus. Indeed, Maxim saw strength in its handset (smartphone) programs and across industrial customers, while noting a notebook PC chip slowdown with 3Q sales likely to fall QOQ.
Further, capacity remains tight and Maxim is ramping foundry capacity (30 percent of total capacity), including 300-mm capacity, to keep pace with demand and competition (TI). Lead times rose by two weeks to 14 weeks early in 2Q before leveling off, and could begin falling in calendar 4Q. Indeed, Maxim is likely gaining handset analog share at Samsung, LG, and Nokia with its integrated analog baseband, likely at the expense of National.''
MEMC Electronic Materials Inc.
Edwin Mok, an analyst with Needham & Co. LLC, said: ''MEMC reported 2Q10 results that missed consensus estimates due to lower than expected revenue from SunEdison and weaker margins. Semi wafer saw a healthy rebound, but in its solar wafer business, higher prices were again limited by high tolling costs. Additionally, lower SunEdison sales in 2Q10 suggest some delays in project completion, which probably disappointed the Street. While the lowered 2010 earnings guidance should temper expectations, we'd wait for improvements on solar wafer cost and better visibility of SunEdison's project timing before revising our rating.''
NetLogic Microsystems Inc.
Hans Mosesmann, an analyst with Raymond James, said: ''NetLogic delivered a solid quarter with 2Q10 sales and non-GAAP EPS of $95 million (up 10.2 percent q/q) and $0.38 compared to our $95.0 million and $0.32 estimates (also consensus), respectively.
Cisco sales were down 4 percent q/q (~27 percent of sales) due to inventory work-down of more mature products, somewhat offset by growth in knowledge-based products. Huawei was down to slightly less than 10 percent of sales from 12 percent in the prior quarter due to a temporary inventory drawdown from a transition to a vendor management inventory program. Sales at Alcatel Lucent accounted for 12 percent of sales (up from less than 10 percent), driven by strong carrier spending on advanced 3G and emerging LTE infrastructure build-out.''
David Rubenstein, an analyst with MF Global, said: ''Q1 earnings were under our forecasts with softness in the LCD panel and solar cell businesses. LCD panels rose 48 percent YoY but operating profit margin was below our expectations at under 1 percent. We believe that the structural problems in both large-size and small-size panels may be difficult to mitigate going forward.
Mobile phones were firm, fuelled by buoyant domestic demand. However, Sharpís overseas businesses remain unclear with the softness at Microsoft Kin and continued rise of strong smart phone rivals.Solar cell profits were also disappointing as operating margin was under 2 percent. We think that thin-film price pressures in the euro area will prevent profit growth in this division.''
Ian Ing, an analyst with Gleacher & Co., said: ''Synaptics reported a $0.07 EPS beat on higher revenue, but guided the EPS midpoint $0.01 below consensus as operating expense spending offset strong revenue guidance. Full year guidance was at least $7 million above consensus at the midpoint.
We continue to believe that tailwinds in notebooks remain on higher ASPs from clickpads (now 10 percent of unit mix) and commercial mix as select SMB enterprise upgrades occur. We believe that tablet revenue contributions (expected in FY11) will help Y/Y PC growth rates exceed those in handsets.''
C.J. Muse, an analyst with Barclays Capital, said: While another strong order quarter will drive many to call a peak (again), we look for growth from HDD, memory, and SOC staying at a relatively high level to position TER for sustained strong earnings power.''
Varian Semiconductor Equipment Associates
Edwin Mok, an analyst with Needham & Co. LLC, said: ''VSEA reported another strong quarter and provided higher guidance. We believe the guidance confirms VSEA's unmatched market share position and increased adoption of new implant applications. Additionally, solar appears to be gaining momentum as VSEA plans to ship eval tools to multiple customers. We continue to believe VSEA is well positioned to outperform the industry as the cycle moves toward the next phase of capacity expansion.''
Vernon Essi, an analyst at Needham & Co. LLC, said: ''VLTR reported Q2 revenue that was with the $40 million expectations and EPS of $0.40 that beat the $0.37 consensus estimate. Q3 revenue guidance was $41.5M-43.5M and $0.38-$0.41 in EPS which is right in line with consensus of $42.6M and $0.40. Notebook came in slightly lighter than expected as OEMs are transitioning from the Montevina architecture to Calpella heading into Q3 and shipments took a small pause.''
Dunham Winoto, an analyst with Avian Securities LLC, said: ''ZRAN posted Q2 of $93 million (+3 percent Q/Q)/$(0.08), largely in-line with our expectations of $92 million/$(0.07). It appears that shipments for DTV (28 percent of total revenues) which grew 7 percent Q/Q are improving compared to Q1 though at a more modest rate than expected. Meantime, DSC remains solid and grew 5 percent Q/Q, while DVD was up 13 percent, respectively.
The outlook for Q3 is for a sequential improvement in revs to $98-103 million (mid point of 8 percent), slightly below our prior forecast of $104 million and consensus of $111 million, respectively. While our expectations had been more modest than consensus, it seems that order rates for DTV continues to be quite lumpy and less robust than expected, which contributes to the weakness.''
Things are looking fairly optimistic after great Q2 results all around. But I too have the same question whether this is going to continue for the coming quarters as well or whether Q2 results show the boost triggered by the packages injected into the economic system by the governments. The article "15 unknowns for electronics companies" by Bolaji Ojo published on this website (dated 7/29/2010 12:36 PM EDT) and related comments is a good insight into this topic.
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