Monolithic Power Systems bucked the recent trend of semiconductor stocks guiding lower for the first quarter. MPWR stock jumped on Thursday after the maker of power management chips delivered a beat-and-raise earnings report, thanks in part of sales of chips for artificial intelligence systems.
The Kirkland, Wash.-based company late Wednesday said it earned an adjusted $2.88 a share on sales of $454 million in the fourth quarter. Analysts polled by FactSet had expected earnings of $2.85 a share on sales of $452 million. On a year-over-year basis, Monolithic Power Systems earnings declined 9% while sales dipped 1%.
For the current quarter, Monolithic expects to earn an adjusted $2.63 a share on sales of $447 million, based on the midpoint of its outlook. Wall Street analysts had been looking for earnings of $2.53 a share on sales of $432 million in the first quarter.
On a conference call with analysts, Chief Financial Officer Bernie Blegen said the company is benefiting from several trends. They include the growth of AI applications and increased semiconductor content in automobiles.
Meanwhile, declining sales in the communications infrastructure, industrial and consumer electronics markets were a drag on the company's results, he said.
MPWR Stock Breaks Out
On the stock market today, MPWR stock jumped 14.2% to close at 737.07. Earlier in the session, it hit a record high of 760. With the move, MPWR stock broke out of a flat base at a buy point of 647.12, according to IBD Market Smith charts.
Also, Monolithic raised its quarterly cash dividend to $1.25 a share from $1.
In other news, Monolithic announced the acquisition of Axign, a Netherlands-based fabless semiconductor startup that specializes in programmable multicore digital signal processors. Axign's audio processors demonstrate near-zero distortion signals, with significantly reduced power consumption for automotive and consumer audio systems.
With the deal, Monolithic expands into a new $1 billion market, Blegen said.
At least nine Wall Street firms raised their price targets on MPWR stock after the company's earnings report.
Further, MPWR stock is on IBD's Tech Leaders list and Long-Term Leaders watchlist.
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