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InvenSense 1Q17 results +2
The most important part of the conference call was guidance which is for:
- 2-4 cents of earnings, which is in-line,
- on $77-83M of revenue, which beats by $1.8M at the midpoint
- Mobile: pricing has stabilized somewhat, the real improvement is that high performance products are shifting down the food chain to mid and low-tier products. Pokemon-Go was cited as an initial use case for augmented reality where the use case demands this.
- Augmented/Virtual Reality: hopefully growing to 30-40M in the next few years. The devices are sensor-rich, but those numbers aren't exactly overwhelming.
- Ultraprint: should begin sampling to lead customers in early 2017
- Drones: management cited 30M sold per year, and said they have content in all major brands. This confirms my thoughts that volumes just aren't significant, even if content value expands as management hopes.
- Automotive: sampling to OEMs should begin this fiscal year, management thinks they have a tech advantage in the safety portion of this market.
- IoT: percentage of revenue fell overall, and this still sounds like a slow burning fuse to me, with a questionable level of bang at the end.
InvenSense has reported results for its fiscal first quarter of 2017:
- EPS loss of 5 cents beats by a penny
- on revenue of $60.6M, which beats by $400K
That's a pretty grim result, but it's slightly better than expected.
The company also announced new 9-axis and 6-axis motion sensing chips respectively aimed at OIS, Augmented and Virtual Reality applications. The main improvements seem to be in real-time responsiveness, particularly where rotation is concerned. While its good to see market-leading progress, I don't any reason why InvenSense won't see the same competitive pressures it has with other motion sensor. That said, there should be some first-to-market benefit, as the 6-axis device is already entering production with a tier 1 OEM. This is likely to be Apple's new phones being introduced in September.
Management's comments in the press release seem to support this view, as well as my previous writings that differentiated microphone products may make some difference. INVN hasn't moved much after hours yet, and I don't think any positive move is warranted so far.Esekla
All content is the opinion of the author, rather than investment advice.
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