Please ensure Javascript is enabled for purposes of website accessibility

Why Silicon Labs Stock Soared Today

By Steve Symington – Apr 24, 2019 at 1:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The fabless semiconductor specialist offered an earnings beat and even better forward guidance. Here's what investors need to know.

What happened

Shares of Silicon Laboratories (SLAB 4.66%) were up 14.2% as of 1:00 p.m. EDT Wednesday after the fabless semiconductor company announced strong first-quarter 2019 results.

More specifically, Silicon Labs' quarterly revenue declined 8.4% year over year to $188.1 million, right at the midpoint of guidance provided in January for a range of $183 million to $193 million. That translated to adjusted earnings of $25.8 million, or $0.59 per share, down from $0.87 per share a year earlier but well above guidance for a range of $0.42 to $0.52.

Hand holding smartphone with various smart home devices connected.


So what

As usual, the company's Internet of Things products led the way, with the segment's modest 3% year-over-year revenue growth being more than offset by declines from Silicon Labs' other infrastructure, broadcast, and access segments.

But Silicon Labs CEO Tyson Tuttle also stated the company exited last year with "strong design win momentum," noting that first-quarter bookings were "robust" despite macroeconomic headwinds that have held back growth in recent quarters.

"We believe we are well positioned to outperform the market," Tuttle added.

Now what

For the second quarter of 2019, Silicon Labs expects revenue ranging from $202 million to $212 million, assuming sequential growth from each of its four market segments. That should translate to adjusted earnings per share of between $0.70 and $0.80. Even the lower ends of these ranges stood well above Wall Street's consensus estimates for second-quarter earnings of $0.63 per share on revenue of $201.5 million.

Coupled with Silicon Labs' earnings beat to start the year, it's hardly surprising to see the stock rallying in response today.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Silicon Laboratories. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Silicon Laboratories Stock Quote
Silicon Laboratories
$143.06 (4.66%) $6.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.