Dialog Semiconductor: Preliminary results indicate above-consensus margins
Dialog Semiconductor: (NEUTRAL, Fair Value EUR25.9 (+82%))Preliminary results indicate above-consensus margins
On Friday, Dialog released preliminary Q2 results with sales 2% above consensus. Margins came in well above analysts’ estimates, with underlying gross margin at 48.3% (+110bps compared to consensus), and underlying EBIT margin at 14.2% vs. 11.2% for the consensus. The company said it achieved higher manufacturing efficiencies, slightly offset by product mix however. As a reminder, Dialog is still in talks with Synaptics for a potential acquisition, while its business with Apple is still uncertain going forward. We keep our Neutral recommendation and our Fair Value at EUR25.9.
Dialog Semiconductor is engaged in creating and marketing mixed signal integrated circuits for personal, portable, hand-held devices, low energy short-range wireless, LED solid-state lighting and automotive applications. Co. has four segments: Mobile Systems, which includes its power management and audio chips for the wireless systems markets; Automotive and Industrial, which markets products that address the safety, management and control of electronic systems in cars and for industrial applications; Connectivity, with activities that include short-range wireless, digital cordless, Bluetooth and VoIP technology; and Power Conversion, which includes its AC/DC converter solutions.
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