Wolfspeed (WOLF) Q4 Loss Narrows, Revenues Increase Y/Y

Wolfspeed WOLF reported a non-GAAP loss of 2 cents per share for fourth-quarter fiscal 2022, comparing favorably with the Zacks Consensus Estimate of a loss of 10 cents. The year-ago loss was 23 cents per share.

Revenues of $228.5 million were up 57% from the last fiscal year’s quarterly figure, surpassing the consensus mark by 9.98%. Growth in revenues was driven by a continued improvement in the Durham device staff and back-end operations.

Quarter in Detail

In the fiscal fourth quarter, Wolfspeed’s revenues benefited from the growing trend of high-voltage applications’ continuous migration from traditional silicon to silicon carbide. This is owing to various initiatives to move toward greener energy sources.

WOLF is also experiencing rising demand for its silicon carbide on high demand for electronic vehicles.

In the fiscal fourth quarter, WOLF reported a non-GAAP gross margin of 36.5%, which expanded 430 bps from the year-ago fiscal quarter’s number, primarily driven by higher revenues.

Total operating expenses in the quarter were $137.8 million (60.3% of total revenues), down by 21.9% from the last fiscal year’s quarterly figure.

However, Wolfspeed incurred start-up costs, primarily related to Mohawk Valley, totaling approximately $30 million, contributing to the operating loss in the fiscal fourth quarter.

WOLF experienced a non-GAAP operating loss of $8.6 million compared with the operating loss of $35.4 million in the year-ago fiscal quarter.

Wolfspeed Price, Consensus and EPS Surprise

Wolfspeed Price, Consensus and EPS Surprise

Wolfspeed price-consensus-eps-surprise-chart | Wolfspeed Quote

Balance Sheet & Cash Flow

As of Jun 26, 2022, WOLF reported cash, cash equivalents and short-term investments of $1.2 billion compared with $1.28 billion as of Mar 27, 2022.

In the fiscal fourth quarter, WOLF reported cash outflow from operations of $154.2 million compared with $123.4 million in the fiscal third quarter.

Guidance

For the first quarter of fiscal 2023, WOLF expects revenues in the range of $232.5-$247.5 million.

Non-GAAP loss per share is expected to be 11-17 cents.

Zacks Rank & Other Stocks to Consider

Wolfspeed currently has a Zacks Rank #2 (Buy).

WOLF’s shares have fallen 15.3% compared with the Zacks Computer and Technology sector’s decline of 20% in the year-to-date period.

Here are some other top-ranked stocks from the broader sector:

Intuit INTU carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Intuit’s shares have slumped 25.7% in the year-to-date period compared with the Zacks Computer - Software industry’s decline of 16.2%.

Coupa Software COUP carries a Zacks Rank of 2, currently.

COUP’s shares have dropped 55.4% in the year-to-date period compared with the Zacks Internet - Software industry’s decline of 44.6%.

Hewlett Packard HPE is presently Zacks #2 Ranked.

HPE’s shares have dropped 5.3% in the year-to-date period compared with the Zacks Computer - Integrated Systems industry’s decline of 3.2%.

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