Silicon Motion Technology Corp. Beats Estimates, Shares Surge
Silicon Motion Technology just reported results for the fourth quarter of 2013, expanding on a preliminary report filed three weeks ago.
The preliminary release pointed to roughly $52 million in net sales and gross margins between 48% and 49%. The final report pinned sales down to $52.5 million, a 26% year-over-year drop. Non-GAAP gross margins landed at 48.8%, unchanged from the third quarter and up from 44.6% in the year-ago period.
Adjusted earnings landed at $0.30 per American depositary share, down from $0.36 per ADS a year ago. Analysts were expecting adjusted earnings of $0.21 per ADS on $51.8 million in revenue, and Silicon Motion surpassed both of these targets. Shares jumped about 5% in after-hours trading.
The Taiwan-based microchip designer saw storage controller chips for solid-state disks deliver roughly half of the company's total sales in the quarter. The company is moving out of less profitable commodity markets such as 4G LTE mobile handset radio transceivers. Sales in that segment plunged 41% year over year, and the stronger product mix helped push Silicon Motion's margins higher.
Looking ahead, CEO Wallace Kou sees next-generation radio chips driving Silicon Motion's growth in 2014, with the first products getting ready to ship: "I am pleased to announce that the testing of our new LTE-Advanced transceiver paired with Samsung's new LTE-Advanced baseband is nearing completion for our first flagship win at Samsung's 2014 smartphone lineup."
LTE-Advanced is the next version of the popular LTE mobile technology, many times faster and much more reliable than today's 4G LTE.
The article Silicon Motion Technology Corp. Beats Estimates, Shares Surge originally appeared on Fool.com.Fool contributor Anders Bylund and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.
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