SiTime shares plunged on Thursday after the chipmaker slashed its guidance for the second half of 2022. SITM stock tumbled by nearly 35% on the news.
The Santa Clara, Calif.-based company late Wednesday easily topped Wall Street's sales and earnings targets for the second quarter. However, on a conference call with analysts, it warned of slowing orders as some customers deal with high inventories.
SiTime earned an adjusted $1.11 a share on sales of $79.4 million in the June quarter. Analysts polled by FactSet expected SiTime earnings of $1.01 a share on sales of $77.1 million. On a year-over-year basis, SiTime earnings surged 141% while sales jumped 78%.
It was the company's eighth-straight quarter of triple-digit percentage earnings gains on an absolute value basis.
SiTime Outlook Disappoints
For the current quarter, SiTime forecast adjusted earnings of 85 cents a share on sales of $73 million. But Wall Street had been looking for earnings of $1.13 a share on sales of $85.6 million in the third quarter.
Also, SiTime lowered its full-year sales growth target to 35%, down from "at least 50%." The company is seeing the most weakness in sales of chips for low-end consumer electronics devices. But it also is seeing a pushout of orders and inventory issues with its industrial and automotive customers.
SiTime executives "admitted to worse than normal visibility into December, leaving the door open for more declines," Barclays analyst Blayne Curtis said in a note to clients. Curtis reiterated his overweight rating on SITM stock but cut his price target to 195 from 230.
SITM Stock Tumbles
On the stock market today, SITM stock plummeted 34.9% to close at 136.40. During the regular session Wednesday, SITM stock jumped 5.6% to close at 209.51.
SiTime specializes in making micro-electromechanical systems, known as MEMS, for timing devices in electronics. Timing devices synchronize the activities of various chips in a system.
SITM stock ranks ninth out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 91 out of 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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