Analyst Previews Monolithic Power Earnings: 'Expect Strong Q1 Results, Q2 Outlook'

Monolithic Power Systems, Inc. MPWR is expected to report first quarter results on May 2 and BlueFin's Paul Peterson sees the chip maker ‘s March quarter results "modestly above Street consensus estimates."

Wall Street analysts, on average, expect earnings of $0.44 a share on revenue of $82.99 million. This implies a year-over-year increase of 19 percent in earnings and 12.9 percent in revenues. The company has guided first quarter revenue of $81 million to $85 million.

"Our industry checks suggest that the quarter played out better than expected. The Asia channel partners that we polled (~40-45% of sales) were roughly flat sequentially, better than the mid-single digit decline that they anticipated at the outset of the quarter. Our reads indicate that the big upside came from a ramping server program at Foxconn (2354.TW)," Peterson wrote in a note.

The analyst expects MPWR to guide second quarter revenues up 10-12 percent sequentially, as channel partners forecasting 10-15 percent sequential growth in seasonally strong June quarter. Wall Street consensus for the June quarter is $91.5 million, up 10.2 sequentially.

Looking ahead, Peterson noted that the analog supplier still poised for about 15 percent growth in 2016 (2016 Street consensus growth is 13.7 percent) in a relatively "stagnant semiconductor market."

The analyst highlighted that the company is well-positioned to gain share in server point of load and core power, when Intel Corporation INTC transitions to the Purely platform in late 2016.

Peterson believes focus on the Data Center and increased penetration in the automotive space will continue to drive significant growth going forward. Meanwhile, the analyst noted that MPWR's nascent AC/DC portfolio is winning at top tier power supply companies as well.

Though the company is not immune to global macro weakness, Peterson said market share gains and product line expansion will help the company navigate the modest global growth in the semiconductor industry.

Shares of Monolithic Power Systems fell 2.09 percent to $62.85.

The stock has dropped 3 percent this year.