Monolithic Power forecasts Q4 revenue above estimates, but shares slump
Oct 30 (Reuters) -Monolithic Power Systems MPWR.O forecast fourth-quarter revenue above Wall Street estimates on Wednesday, but guided for a sequential drop in sales as weak end-market demand for EVs potentially hampers sales of its power control products and semiconductors used in vehicles, offsetting AI-linked benefits.
Shares of the Kirkland, Washington-based company fell about 9% in trading after the bell, as it failed to impress investors accustomed to blockbuster beat-and-raise quarters from AI-linked chip firms.
The company forecast fourth-quarter revenue between $600 million to $620 million, with a midpoint of $610 million, above analysts' average estimate of $602.7 million. At the midpoint, sales would sequentially decline close to 2%.
Revenue grew more than 22% sequentially in the September quarter.
A boom in the adoption of generative AI technology has led to an increase in demand for the hardware required to help run advanced data centers, helping providers like Monolithic Power.
However, weak end-market demand for EVs has potentially hampered sales of its products used in vehicles, limiting its ability to outperform estimates by a large margin.
Weakness in automotive, industrial, and communications markets persists for Monolithic Power, Morningstar analysts said in August, adding that the company is still gaining share in these industries during downturns.
Revenue for the third quarter stood at $620.1 million, compared with analyst's estimates of $600.6 million, according to LSEG data.
Adjusted profit for the September quarter stood at $4.06 per share. Analysts had expected $3.97.
Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber
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