Semiconductor Stocks Look Like Brad Pitt But Who Cares?

Investors in many semiconductor stocks are acting like country singer Shania Twain when it comes to first-quarter earnings. Their response to multiple beat-and-raise reports has been, “That don’t impress me much.”


Advanced Micro Devices (AMD), NXP Semiconductors (NXPI) and Silicon Labs (SLAB) are among the companies that have seen their shares fall. The declines came despite beating Wall Street’s March-quarter estimates and guiding higher this week. Other semiconductor stocks that swooned after beat-and-raise reports this week include Texas Instruments (TXN) and Macom Technology Solutions (MTSI).

Semiconductor stocks have fallen out of favor with investors. IBD’s fabless semiconductor industry group ranks No. 165 out of 197 groups that IBD tracks. Six months ago, it ranked No. 15. IBD’s semiconductor manufacturing group ranks No. 117, vs. No. 69 six months ago.

The latest of the semiconductor stocks to take a post-earnings tumble is Skyworks Solutions (SWKS).

Also, late Thursday, Skyworks reported fiscal second-quarter results that beat estimates and it guided slightly higher for the current quarter.

In afternoon trading on the stock market today, Skyworks stock was down 7.8%, near 182.45.

Power Integrations Stock Bucks Trend

Meanwhile, Power Integrations (POWI) saw its shares drop in early trading Friday before they rebounded. POWI stock was up 0.6%, near 84.55, in afternoon trading. It posted a solid beat-and-raise report late Thursday.

San Jose, Calif.-based Power Integrations earned an adjusted 76 cents a share on sales of $173.7 million in the first quarter. Analysts expected earnings of 56 cents a share on sales of $149.5 million. On a year-over year basis, Power Integrations earnings rose 100% while sales increased 58%.

Further, for the current quarter, the company forecast flat sales on a sequential basis. That would translate to 63% growth year over year. Wall Street had predicted $140.7 million in second-quarter sales. Power Integrations makes power conversion and management chips.

Semiconductor Stocks: Cirrus Logic Disappoints

Elsewhere among semiconductor stocks, Cirrus Logic (CRUS) was a rare poor performer in the March quarter. The audio-chip maker released its quarterly results late Thursday.

Austin, Texas-based Cirrus Logic earned an adjusted 66 cents a share on sales of $293.5 million in its fiscal fourth quarter ended March 27. Analysts expected earnings of 71 cents a share on sales of $302.5 million. On a year-over-year basis, Cirrus Logic earnings fell 3% while sales rose 5%.

Additionally, for the current quarter, Cirrus Logic expects to generate $260 million in sales, based on the midpoint of its outlook. Wall Street was looking for $282.7 million.

Semiconductor stocks analyst Matthew Ramsay with Cowen called Cirrus Logic’s surprising miss “painful.”

Cirrus Logic stock plummeted 16.5%, near 72.05, in afternoon trading Friday.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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