Q3 Earnings Roundup: Western Digital (NASDAQ:WDC) And The Rest Of The Semiconductors Segment
As Q3 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the semiconductors stocks, including Western Digital (NASDAQ:WDC) and its peers.
The semiconductor industry is driven by cyclical demand for advanced electronic products like smartphones, PCs, servers, and data storage. While analog chips serve as the building blocks of most electronic goods and equipment, processors (CPUs) and graphics chips serve as their brains. The growth of data and technologies like artificial intelligence, 5G, Internet of Things, and smart cars are creating the next wave of secular growth for the industry.
The 41 semiconductors stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 0.8% while next quarter's revenue guidance was 4.1% below consensus. Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, but semiconductors stocks held their ground better than others, with the share prices up 26.3% on average since the previous earnings results.
Western Digital (NASDAQ:WDC)
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Western Digital reported revenues of $2.75 billion, down 26.4% year on year, topping analyst expectations by 3.3%. It was a mixed quarter for the company, with an impressive beat of analysts' EPS estimates but a decline in its operating margin.
“Western Digital’s fiscal first quarter results exceeded our expectations as the team’s efforts to bolster business agility and develop differentiated and innovative products across a broad range of end-markets have resulted in sequential margin improvement across flash and HDD businesses,” said David Goeckeler, Western Digital CEO.
The stock is up 49.3% since the results and currently trades at $58.
Is now the time to buy Western Digital? Access our full analysis of the earnings results here, it's free.
Best Q3: Nvidia (NASDAQ:NVDA)
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Nvidia reported revenues of $18.12 billion, up 206% year on year, outperforming analyst expectations by 12.5%. It was a stunning quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.
Nvidia scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 14.9% since the results and currently trades at $574.4.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Power Integrations (NASDAQ:POWI)
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Power Integrations reported revenues of $125.5 million, down 21.7% year on year, falling short of analyst expectations by 3.7%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
The stock is up 9.4% since the results and currently trades at $82.25.
Read our full analysis of Power Integrations's results here.
Skyworks Solutions (NASDAQ:SWKS)
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Skyworks Solutions reported revenues of $1.22 billion, down 13.4% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its gross margin.
The stock is up 19% since the results and currently trades at $106.5.
Read our full, actionable report on Skyworks Solutions here, it's free.
KLA Corporation (NASDAQ:KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $2.40 billion, down 12% year on year, surpassing analyst expectations by 1.9%. It was a decent quarter for the company, with an impressive beat of analysts' EPS estimates but an increase in its inventory levels.
The stock is up 36.2% since the results and currently trades at $619.98.
Read our full, actionable report on KLA Corporation here, it's free.
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The author has no position in any of the stocks mentioned
