Silicon Motion Technology shares fell Thursday after the chipmaker offered weak guidance for the current quarter, citing supply constraints. SIMO stock fell below the buy point of its recent breakout.
The Hong Kong-based company late Wednesday posted better-than-expected results for the fourth quarter but disappointed with its outlook for the first quarter.
Silicon Motion earned an adjusted $1.90 per U.S. share on sales of $264.4 million in the December quarter. Analysts had forecast earnings of $1.73 a share on sales of $262 million, according to FactSet. On a year-over-year basis, Silicon Motion earnings soared 121% while sales surged 84%.
"We were supply constrained for most of 2021, including the fourth quarter," Chief Executive Wallace Kou said in a news release. "Nevertheless, we were able to create significant incremental value throughout the year by optimizing our limited foundry wafer supply."
Near-Term Outlook Weighs On SIMO Stock
For the current quarter, Silicon Motion expects to generate sales of $225 million to $238 million, up 23% to 30% from the first quarter last year. The midpoint of $231.5 million is short of Wall Street analyst estimates for $245.7 million. Its guidance implies earnings per share of $1.50 vs. estimates of $1.57, according to Wedbush Securities.
However, for the full year, Silicon Motion forecast sales of $1.11 billion to $1.2 billion, up 20% to 30%. Analysts were expecting $1.08 billion in sales in 2022.
On the stock market today, SIMO stock fell 8.3% to close at 79.05. During the recent stock market correction, SIMO stock found support at its 50-day moving average line. But it fell below that support level on Thursday.
On Dec. 7, SIMO stock broke out of a 17-week consolidation period at a buy point of 81.97, according to IBD MarketSmith charts. It notched a record high of 96.89 on Jan. 3 before the stock market correction.
SIMO Stock On Three Watchlists
SIMO stock is on the IBD 50 list of top-performing growth stocks. It is also on the IBD Global Leaders and Stock Spotlight lists.
Silicon Motion makes Nand flash controllers for solid-state drives and other storage devices. Its chips are used in data centers, PCs, smartphones, and other applications.
Elsewhere in the semiconductor sector, chipmakers STMicroelectronics and Macom Technology Solutions posted December-quarter results early Thursday.
STMicro stock fell 1.1% to 43.85 even though the European chipmaker delivered a beat-and-raise fourth-quarter report. Macom stock sank 7.9% to 58.08 after the chipmaker delivered better-than-expected December-quarter results but gave an in-line outlook.
In other news, China gave conditional approval to AMD's purchase of Xilinx. The acquisition is on track to close this quarter.
Late Wednesday, Xilinx reported better-than-expected fourth-quarter results thanks to strong data center sales.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
