Yahoo Finance Diodes Inc (DIOD) Q1 Fiscal 2024 Earnings: Misses Analyst Revenue and EPS Forecasts
Revenue: Reported at $302.0 million, falling short of estimates of $305.51 million.
Net Income: GAAP net income stood at $14.0 million, below the estimated $15.16 million.
Earnings Per Share (EPS): GAAP EPS was $0.30 per diluted share, slightly below the estimated EPS of $0.31.
Gross Profit Margin: Recorded at 33.0%, showing a decline from 41.6% in the same quarter the previous year.
Free Cash Flow: Negative $51.5 million, indicating a significant cash outflow including $20.4 million in capital expenditures.
Operational Efficiency: EBITDA was $48.3 million, or 16.0% of revenue, reflecting a decrease from 26.1% in the prior year's same quarter.
Future Outlook: Expects a return to seasonal growth with projected Q2 revenue of approximately $316 million and a GAAP gross margin of about 33.5%.
On May 9, 2024, Diodes Inc (NASDAQ:DIOD) released its financial results for the first quarter of fiscal 2024, detailing a period of reduced earnings and revenue amidst challenging market conditions. The company, a prominent player in the semiconductor industry, reported these results in its 8-K filing.
Company Overview
Diodes Inc is a renowned manufacturer and supplier of high-quality semiconductor products, serving diverse markets including consumer electronics, computing, communications, industrial, and automotive. The company's extensive product line includes diodes, rectifiers, transistors, MOSFETs, and various power management devices, among others.
Financial Performance Summary
For Q1 2024, Diodes reported revenue of $302.0 million, a significant decrease from $467.2 million in Q1 2023 and below the analyst estimate of $305.51 million. The GAAP net income stood at $14.0 million, or $0.30 per diluted share, which also fell short of the estimated earnings per share of $0.31. This compares to a net income of $71.2 million, or $1.54 per diluted share, in the same quarter the previous year.
The company's gross profit margin declined to 33.0% from 41.6% in Q1 2023, reflecting lower revenue and operational challenges including reduced loading at manufacturing facilities. Operating expenses as a percentage of revenue increased slightly to 28.7% from 23.1% in the prior year's quarter.
Operational and Market Challenges
Diodes' performance this quarter was primarily impacted by slower recovery in consumer, computing, and communications markets, compounded by typical first quarter seasonality influenced by the Chinese New Year holiday. The automotive and industrial sectors, while above target models, faced inventory adjustments and market softness, affecting overall revenue.
Strategic Responses and Future Outlook
In response to these challenges, Diodes is focusing on enhancing factory efficiency and qualifying more products to boost factory loading. President Gary Yu expressed optimism about returning to seasonal growth in Q2, supported by stabilizing distributor inventory levels and an expected improvement in global demand.
"With early evidence of recent pricing pressures subsiding, Diodes is well positioned with the size and scale to support a return to growth as global demand and distributor inventory improves across our end markets," stated Gary Yu.
Financial Statements Insights
The company's EBITDA for Q1 was $48.3 million, or 16.0% of revenue, a decrease from $121.8 million, or 26.1% of revenue in Q1 2023. The cash flow from operations was negative at $31.1 million, and the free cash flow was also negative at $51.5 million, after accounting for $20.4 million in capital expenditures.
As of March 31, 2024, Diodes had approximately $280 million in cash and equivalents, with total debt standing at about $70 million. Working capital was reported at approximately $824 million.
Looking Ahead
For Q2 2024, Diodes anticipates revenue to be around $316 million, reflecting a 4.6% increase from Q1 2024. The expected GAAP gross margin is projected at 33.5%, with non-GAAP operating expenses around 28.5% of revenue.
Overall, while Diodes Inc faced significant headwinds in Q1 2024, strategic adjustments and market stabilization are expected to aid in a rebound in the coming quarters. Investors and stakeholders will be watching closely to see if these projections hold true as the market conditions evolve.
For detailed financial figures and further information, refer to the full earnings release and join the upcoming conference call scheduled for May 9, 2024.
Explore the complete 8-K earnings release (here) from Diodes Inc for further details.
This article first appeared on GuruFocus.
