The 10-second takeaway
For the quarter ended Sep. 29 (Q3), Silicon Laboratories beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped.
Gross margins contracted, operating margins grew, net margins dropped.
Silicon Laboratories recorded revenue of $149.5 million. The 12 analysts polled by S&P Capital IQ anticipated a top line of $142.7 million on the same basis. GAAP reported sales were 25% higher than the prior-year quarter's $119.1 million.
EPS came in at $0.61. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.52 per share. GAAP EPS of $0.24 for Q3 were 7.7% lower than the prior-year quarter's $0.26 per share.
For the quarter, gross margin was 57.9%, 330 basis points worse than the prior-year quarter. Operating margin was 18.2%, 650 basis points better than the prior-year quarter. Net margin was 6.7%, 280 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $146.9 million. On the bottom line, the average EPS estimate is $0.57.
Next year's average estimate for revenue is $558.8 million. The average EPS estimate is $2.13.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 353 members out of 379 rating the stock outperform, and 26 members rating it underperform. Among 121 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 118 give Silicon Laboratories a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Silicon Laboratories is outperform, with an average price target of $42.70.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Silicon Laboratories. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.