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IDT 1Q17 results -5
18:04 01-Aug-16
Well, so much for nothing time sensitive...
Guidance for current quarter revenue is $184M +-5M, which misses by $9M. EPS guidance is for 33 cents, which misses by 4 cents.
Management revealed that the reason is that Serial RapidIO sales were lower because Huawei is replacing the chips from IDT with a custom ASIC of its own design, impacting the business going forward. This represents a recurring $12M revenue loss. The real fear is that the Chinese are further ahead in chip development than previously thought.
Even so, management says they do not expect other share loss, and that the business is diversified out of 4G base stations. This rings true to me in that virtually nobody outside of China wants their communications infrastructure produced there. Even if there were some further were loss, the impact would likely be minimal. Revenue for the entire segment is about $25M. Thus, the initial market reaction of a 17% drop in IDTI seems overdone. Overreactions seem to be commonplace with IDTI, and my best guess is that this should be more like a 5%, or at most 10%, drop for the stock. Nonetheless, almost every analyst asked about it, and it may be a while before they sort things out.All other areas of the business seem to be right in stride:
- Wireless charging increased to record levels. Tier-1 wireless manufacturers have all completed wireless charging designs, but ramping them could take 6 months to a year or more. Next frontier is automotive.
- Automotive sensing interest is extremely strong and should represent a new growth driver that exceeds wireless charging.
- Memory qualification with Intel is ahead of schedule and new
memory interfaces "could be a lottery ticket".
- Timing and mobile sensing chips also performed particularly well.
Integrated Device Technology has announced financial results for its first quarter of fiscal 2017:
I'm currently listening to the conference call, but am not expecting anything particularly time-sensitive worth writing up. Assuming that's correct, I will have any more general notes out by morning.
- EPS of 36 cents is in-line
- on revenue of $192.1M, which beats by $1M