Diodes reports Q1 EPS 28c, consensus 31c – TipRanks Financial Blog

Reports Q1 revenue $302.0M, consensus $305.5M. Gary Yu, President of Diodes, stated, “Revenue in the quarter reflected the slower than expected recovery in the consumer, computing and communications markets coupled with typical first quarter seasonality due to the Chinese New Year holiday. However, late in the quarter we began to see some signs of demand improvement with distributor inventory levels starting to stabilize, supporting our belief that the first quarter should be the low point and are guiding for a return to seasonal growth in the second quarter. In the automotive and industrial end markets, first quarter combined product revenue remained above our target model of 40% but continues to be affected by inventory adjustments and softness in certain areas. More broadly, the slower overall demand environment in the quarter contributed to reduced loading at our manufacturing facilities both internal production as well as from our manufacturing service agreements, temporarily impacting gross margin. We expect gross margin to resume toward our target of 40% as we increase our factory loading by qualifying more products combined with increasing revenue growth from our higher-margin automotive and industrial markets, consistent with our historical performance and long-term growth strategy. In summary, 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. We remain focused on operating our manufacturing facilities at a high level of efficiency as demonstrated by the steps the Company has taken over the past several quarters to further develop our process technology and capabilities, while lowering manufacturing costs across our operations.”