Alpha and Omega Semiconductor (NASDAQ:AOSL) Announces Earnings Results, Beats Expectations By $0.07 EPS

Key Points

• Alpha and Omega Semiconductor reported a quarterly loss of $0.07 per share, beating analyst estimates of a $0.14 loss. Revenue of $177.76 million also topped expectations, but was down 2.6% year over year.
• AI and server demand provided a bright spot: Advanced Computing revenue rose more than 50% sequentially and 80% year over year, reaching about 20% of total revenue. Non-GAAP gross margin improved to 25.2%, helped by a richer product mix.
• Traditional markets remained weak, with PC-related revenue down about 30% sequentially and consumer revenue down 22.9%. Management forecast December-quarter revenue of about $180 million, expecting growth in communications and industrial markets to offset a decline in computing.

Alpha and Omega Semiconductor (NASDAQ:AOSL - Get Free Report) announced its earnings results on Thursday. The semiconductor company reported ($0.07) earnings per share for the quarter, beating analysts' consensus estimates of ($0.14) by $0.07, FiscalAI reports. Alpha and Omega Semiconductor had a negative net margin of 6.23% and a negative return on equity of 4.88%. The business had revenue of $177.76 million for the quarter, compared to the consensus estimate of $176.20 million. During the same period last year, the firm posted $0.13 earnings per share. Alpha and Omega Semiconductor's quarterly revenue was down 2.6% on a year-over-year basis.

Here are the key takeaways from Alpha and Omega Semiconductor's conference call:

• AI and server demand surged: Advanced Computing revenue grew more than 50% sequentially and 80% year over year, with AI and server applications now about 20% of total revenue. Management said the business is broadening across customers and platforms, though many opportunities are still relatively new.
• Margins improved with a richer product mix: September-quarter non-GAAP gross margin rose 150 basis points sequentially to 25.2%, while the non-GAAP loss narrowed to $0.07 per share from $0.13 in the prior quarter. Management said improved mix was the main driver, with pricing also turning slightly favorable.
• Traditional PC and consumer markets remain weak: PC-related revenue fell about 30% sequentially, and management expects elevated memory costs and component shortages to persist, with no near-term PC recovery anticipated. Consumer revenue declined 22.9% sequentially, led by weakness in appliances, gaming, and wearables.
• Management expects counter-seasonal growth in the December quarter: Revenue is forecast at approximately $180 million, plus or minus $10 million, with non-GAAP gross margin of 25.7%, plus or minus 1%. Growth in communications and power supply and industrial is expected to help offset a mid-to-high-single-digit sequential decline in computing revenue.

Alpha and Omega Semiconductor Trading Down 12.7%

Shares of AOSL stock traded down $2.69 during trading hours on Thursday, hitting $18.48. 1,202,882 shares of the company's stock were exchanged, compared to its average volume of 508,071. Alpha and Omega Semiconductor has a 12-month low of $17.01 and a 12-month high of $54.34. The business's 50 day simple moving average is $25.19 and its 200-day simple moving average is $30.25.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on the stock. Wall Street Zen cut shares of Alpha and Omega Semiconductor from a "hold" rating to a "sell" rating in a research report on Saturday, July 25th. Weiss Ratings reiterated a "sell (d-)" rating on shares of Alpha and Omega Semiconductor in a research report on Thursday, October 15th. Needham & Company LLC cut their target price on shares of Alpha and Omega Semiconductor from $50.00 to $45.00 and set a "buy" rating for the company in a research report on Thursday, August 13th. Stifel Nicolaus reduced their target price on Alpha and Omega Semiconductor from $38.00 to $34.00 and set a "hold" rating on the stock in a research note on Monday, October 5th. Finally, B. Riley Financial lowered their price target on Alpha and Omega Semiconductor from $34.00 to $25.00 and set a "neutral" rating on the stock in a research report on Friday, October 23rd. Three investment analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, Alpha and Omega Semiconductor has a consensus rating of "Hold" and an average price target of $38.67.

Alpha and Omega Semiconductor Company Profile

Alpha and Omega Semiconductor Limited NASDAQ: AOSL is a semiconductor company that designs, develops and supplies power management products. Its portfolio includes power MOSFETs, power integrated circuits, transient voltage suppressors, insulated-gate bipolar transistors and other power semiconductor devices used to manage, convert and protect electrical power.

The company's products are used in applications including personal computers, servers, telecommunications equipment, consumer electronics, industrial systems, automotive equipment and power supplies.

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