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IDT 1Q18 results ?2


IDT got a downgrade from BofA/ML this morning, which thinks the company might have trouble hitting growth projections.  Regardless of the next set of quarterly numbers, I think this morning's drop is unwarranted and a small but buyable opportunity.

On 07/31/2017 05:37 PM, Esekla wrote:

The IDT conference call has just concluded.  Guidance provided for the current quarter was:

  • revenue $201M +/- $5M, beats by $1M
  • EPS of 34 cents, misses by a penny
  • buyback authorization was also increased by $200M

The business seems to be hitting on all cylinders, but as I've mentioned before, it is well-understood by analysts and IDTI seems fairly valued at present.  In response to multiple questions, management refused to affirm FY guidance in an explicit, quantified fashion.  Nevertheless, it sees awards significantly increasing across nearly all end markets.  Some notes on specific segments are:

  • Wireless Charging: There is some concern about Samsung taking wireless charging development in-house, but management remains confident on the market, seeing it in the process of moving from early adopter to mainstream.  Another moving part that was not mentioned is how IDT avoided Apple and chose to maintain margins instead.  That choice has been biting Apple, and I doubt it would change its approach, but the dynamic is potentially significant.
  • Sensors: new sensors types are already available, and more are on the way.  I continue to see this and memory interfaces as the strongest growth drivers.
  • Communications: This was one of the strongest contributors. 40Gb optical interfaces sold well and should be stable for two years. 100Gb should be available this fiscal year, and become majority of such sales next fiscal year.  New RF mm wave solutions should also be made available soon, but these will have a long slow, long ramp.
  • Computing: As I've mentioned before, communications of this sort together with memory interfaces for the new Skylake processors should be at least as important to cloud computing as processor speed for the foreseeable future. There wasn't a lot of detail available here, but I think the details from the communications segment bode well.

In conclusion, although the business is performing very well and appears to have excellent prospects, I think that's priced in already.  I sometimes call out dips in the stock that I think are minor opportunities, and I don't see one here.  Instead, I'd expect IDTI to move largely in conjunction with the broader technology market, which has been shaky lately, for the near-term.

On 07/31/2017 04:21 PM, Esekla wrote:

Integrated Device Technology has reported results for its first quarter of fiscal 2018:

  • EPS of 33 cents beats by a penny
  • on revenue of $196.7M, which beats by $1.7M
All segments seem to be performing well, but given that 12% of revenue was from the GigPeak acquisition, this doesn't look overwhelmingly positive.  Shares are up very slightly, though, in after hours trading.  More may follow after the conference call, which starts momentarily.