MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) delivered fiscal fourth-quarter 2018 non-GAAP earnings of 16 cents per share, in line with the Zacks Consensus Estimate. The figure increased 23.1% on a sequential basis but declined drastically from the year-ago quarter.
The sequential increase in earnings was driven by prudent cost management.
Adjusted revenues decreased 9.1% year over year but increased 9.7% on a sequential basis to $151.2 million, missing the Zacks Consensus Estimate of $153 million. However, the figure came within the guided range.
Notably, shares of MACOM have lost 53.5% on a year-to-date basis compared with the industry’s decline of 16.7%.
Operating Details
In fiscal fourth-quarter 2018, non-GAAP gross margin came in at 54.8%, contracting 330 basis points (bps) on a year-over-year basis and 120 bps sequentially.
Non-GAAP operating expenses, as a percentage of revenues, came in at 42.4%, which expanded 710 bps from the prior-year quarter but contracted 220 bps from the fiscal third quarter.
Adjusted operating margin came in at 12.3%, which expanded 1050 bps from the prior-year quarter and 90 bps from the fiscal third quarter.
Adjusted EBITDA was $26.1 million, down from $47.3 million in the year-ago quarter. However, the figure was up from $24.1 million in the fiscal third quarter.
Balance Sheet & Cash Flow
At the end of fiscal fourth quarter, cash equivalents and short-term investments were $192.9 million compared with $182.9 million in the fiscal third quarter. Inventories were $122.8 million, down from $122.9 million a year ago.
Long-term debt obligations, excluding current portion, were $658.4 million in the fiscal fourth quarter.
Guidance
For fiscal first-quarter 2019, MACOM expects adjusted revenues between $150 million and $156 million. The Zacks Consensus Estimate for revenues is pegged at $155.7 million.
The company’s earnings are anticipated in the range of 18-22 cents per share. The Zacks Consensus Estimate for the same is pegged at 20 cents per share.
Further, non-GAAP gross margin is anticipated in the range of 55-57%.
Zacks Rank & Key Picks
Currently, MACOM carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are boohoo group plc (OTC:BHOOY) , QuinStreet, Inc. (NASDAQ:QNST) and AMETEK, Inc. (NYSE:AME) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for boohoo group, QuinStreet and AMETEK is currently pegged at 25%, 25% and 10.97%, respectively.
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