Micrel will report March quarter results on Thursday, April 28th. Management guided March quarter revenue between $57M and $61M (either down 4.1 percent quarter-to-quarter or up 2.7 percent, or somewhere in between). The midpoint of this revenue estimate, down 0.8 percent quarter-to-quarter, is based on a 50 percent turns ratio, up from the low 40s in the December quarter.
We believe that Micrel's bullish outlook for analog ASPs has not yet occurred. We believe the quarter tracked to plan with strong bookings in January, followed by a slight slow-down in February and March. We have heard from industry sources in distribution that the first two weeks of April have seen booking increases, which may signal a slightly stronger than seasonal summer. We look forward to learning from Micrel's management if the strength is broad enough to lift revenue above the low single digit growth we are modeling. We maintain our hold on Micrel as valuations continue to compress on analog semiconductor stocks.
We believe that ASP trends are improving. However, the results of stronger ASPs are likely to be seen in margins, but not in increased revenue growth. Unit growth continues to hamper revenue growth efforts at analog semiconductor companies. [They're shipping more pieces, but that tends to push prices downward.] The [increased reliance on] the consumer market segment appears to be having a larger impact on analog semi sales than we were expecting, causing slightly lower March quarter booking patterns.
We believe that lead-times have stabilized, but have not moved out appreciably in the last quarter. Production demands have been well forecast and supply has kept pace with demand. We may hear that lead-times have the early sign of extension, but we believe this may only be a sign that lead-times are returning to supportable levels of four to six weeks.
We believe that Micrel has done a good job of replacing engineering turn-over. The company appears to be hiring from both college levels and very senior levels. We would like to hear that the company has increased the ranks of mid-level engineering staffs as these staff members are often the most productive members of engineering teams. More importantly, we look forward to seeing the new product roadmaps at the company's upcoming analyst event on Monday May 2nd.