Semiconductor Stocks Can’t Catch A Break, Analyst Says

Semiconductor stocks moving on earnings news Friday included Microchip Technology (MCHP), Power Integrations (POWI), Skyworks Solutions (SWKS) and Synaptics (SYNA). But despite beat-and-raise reports, most chip stocks have faltered this earnings season.

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“Semis cannot catch a break,” said Jordan Klein, managing director for tech, media and telecom sector trading at Mizuho Securities. “Sentiment (is) worsening for analog, cyclical and wireless” semiconductor stocks, he said in a note to clients Friday.

Only Advanced Micro Devices (AMD) seems to be holding on to its post-earnings gains, Klein said.

“The prevailing buyside sentiment or mentality seems to be ‘why buy this sector when beats and raises fail to take stocks higher, and anything just in-line gets slammed?'” he said.

Latest Semiconductor Stocks Posting Results

Earnings reports late Thursday from Microchip, Power Integrations, Skyworks and Synaptics got a mixed response from investors. Most were down when the session started, but eventually investors warmed up to a couple of them.

On the stock market today, Microchip stock sank 1.3% to close at 73.18. Power Integrations rose 5% to 83.11. Skyworks crumbled 2.5% to 135.10. And Synaptics climbed 2.9% to 210.10.

Of those semiconductor stocks, Power Integrations and Synaptics delivered the most upside to analyst estimates.

San Jose, Calif.-based Power Integrations earned an adjusted 83 cents a share on sales of $172.7 million in the fourth quarter. Analysts were looking for earnings of 75 cents a share on sales of $170.2 million. Earnings climbed 38% year over year while sales advanced 15%.

For the first quarter, Power Integrations guided to sales of $180 million, topping analyst estimates for $172.8 million.

San Jose, Calif.-based Synaptics earned an adjusted $3.26 a share on sales of $420.5 million in its fiscal second quarter ended Dec. 25. Analysts had expected earnings of $3.10 a share on sales of $405 million. On a year-over-year basis, earnings rose 42% while sales climbed 18%.

For the current quarter, Synaptics forecast sales of $450 million to $480 million. The midpoint of $465 million would represent year-over-year growth of 43%. Wall Street had predicted revenue of $383 million.

Microchip, Skyworks Deliver Modest Beats

Two semiconductor stocks posted only modest quarterly beats on Thursday: Microchip and Skyworks.

Chandler, Ariz.-based Microchip earned an adjusted $1.20 a share on sales of $1.76 billion in its fiscal third quarter ended Dec. 31. Wall Street was looking for earnings of $1.17 a share on sales of $1.75 billion. Microchip earnings jumped 48% from the year-earlier period while sales increased 30%.

For the March quarter, Microchip predicted adjusted earnings of $1.25 a share on sales of $1.82 billion. That’s based on the midpoint of its outlook. Analysts were targeting earnings of $1.20 a share on sales of $1.78 billion.

Irvine, Calif.-based Skyworks earned an adjusted $3.14 a share on revenue of $1.51 billion in its fiscal first quarter ended Dec. 31. Wall Street was targeting earnings of $3.11 a share on sales of $1.5 billion. On a year-over-year basis, Skyworks earnings slipped 7% while sales were flat.

For the current quarter, Skyworks forecast adjusted earnings of $2.62 a share on sales of $1.33 billion. That compares with analyst estimates of $2.60 in per-share earnings and $1.33 billion in sales.

The Philadelphia semiconductor index, known as SOX, is down about 13% so far in 2022. The index includes 30 semiconductor stocks. On Friday, the SOX climbed 0.6%.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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