Monolithic Power forecasts Q4 revenue above estimates, but shares slump

Monolithic Power Systems

30/10/2024 23:06

Oct 30 (Reuters) - Monolithic Power Systems  MPWR.O 
forecast fourth-quarter revenue above Wall Street estimates on
Wednesday, but guided for a sequential drop in sales as weak
end-market demand for EVs potentially hampers sales of its power
control products and semiconductors used in vehicles, offsetting
AI-linked benefits.
    Shares of the Kirkland, Washington-based company fell about
9% in trading after the bell, as it failed to impress investors
accustomed to blockbuster beat-and-raise quarters from AI-linked
chip firms.
    The company forecast fourth-quarter revenue between $600
million to $620 million, with a midpoint of $610 million, above
analysts' average estimate of $602.7 million. At the midpoint,
sales would sequentially decline close to 2%. 
    Revenue grew more than 22% sequentially in the September
quarter. 
    A boom in the adoption of generative AI technology has led
to an increase in demand for the hardware required to help run
advanced data centers, helping providers like Monolithic Power. 
        However, weak end-market demand for EVs has potentially
hampered sales of its products used in vehicles, limiting its
ability to outperform estimates by a large margin.  
    Weakness in automotive, industrial, and communications
markets persists for Monolithic Power, Morningstar analysts said
in August, adding that the company is still gaining share in
these industries during downturns. 
    Revenue for the third quarter stood at $620.1 million,
compared with analyst's estimates of $600.6 million, according
to LSEG data.
    Adjusted profit for the September quarter stood at $4.06 per
share. Analysts had expected $3.97. 

 (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh
Kuber)
 ((ArsheeyaSingh.Bajwa@thomsonreuters.com; +91 8510015800;))