MACOM Technology Solutions Holdings | $MTSI Stock | Shares Fall as Company Reports Lower than Expected Earnings


MACOM Technology Solutions Holdings, Inc. (NASDAQ: MTSI)


MACOM Technology Solutions Holdings, Inc. (MTSI), a global semiconductor solutions company yesterday reported their fiscal third quarter 2017 financial results.

The company reported adjusted third quarter earnings of $0.67 per share which fell short of  analyst expectations of $0.69 per share.

They also reported third quarter revenues of $194.6 million which fell short of analyst expectations of $196 million.   


MACOM Technology Solutions Holdings, Inc. CEO’s  Comments

“We delivered 5 percent sequential growth in our fiscal third quarter, in line with guidance, despite a weakening carrier spending environment in China,” remarked John Croteau, President and CEO of MACOM. “Countering this cyclical weakness, our A&D and multi-market businesses remained solid, and our Data Center business continued to outperform, enabling us to meet guidance.

“Our Networks business overall was up 43.5 percent year-over-year, despite a sequential decline in telecom Optical revenue. PON was down considerably year-over-year and now comprises less than 5 percent of total revenue. Carriers and OEM customers are now squarely focused on deploying 10G PON, which we expect will drive a new wave of investment next year. However, the rapid transition away from 2.5G has created a temporary overhang for our business. Metro/Long-Haul business in China was also weaker than expected in the third quarter, but very strong in other regions.”  Business Wire


MTSI Technical Analysis

MACOM Technology Solutions Holdings

MTSI opened trading yesterday at $61.43 which was up from the previous day’s trading close of $60.55. MTSI closed trading yesterday at $61.06 and spiked down after market to $48.60, equivalent to a 20% decrease from the closing price. Taking a look at the daily chart we can see the last time MTSI traded below these levels we have to go back to May 12th when it traded at lows of $48.55.

Taking a closer look at the daily chart we can see that before the spike down MTSI had been in an overall upward trend dating back to May 4th when it traded at $44.72. MTSI has a float of 44.11 million shares and traded 1.34 times the normal daily trading volume on Tuesday.

For trading purposes, I would like to see MTSI open trading on Wednesday below $52.75 and if it does I would be looking to take a short position at the bell. My stop loss would be $0.50 from my entry position fearing anything more than that and the stock would start to fill in the gap down.


Company Profile

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog RF, microwave, millimeter wave, and photonic semiconductor solutions in the United States, the Asia Pacific, and internationally.

The company offers a portfolio of standard and custom devices, which include integrated circuits, multi-chip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components, and complete subsystems for approximately 40 product lines.

Its semiconductor products are electronic components that are incorporated in electronic systems, such as point-to-point wireless backhaul radios, high density networks, active antenna arrays, radars, magnetic resonance imaging systems, and unmanned aerial vehicles.

The company serves various market, such as networks, which includes carrier and enterprise infrastructure, wired broadband and cellular backhaul, cellular infrastructure, photonic solutions, and fiber optic applications; aerospace and defense comprising military and commercial radar, RF jammers, electronic countermeasures, and communication data links; and multi-market that consist of industrial, medical, test and measurement, and scientific applications.

It sells its products through direct sales force, applications engineering staff, independent sales representatives, resellers, and distributors, as well as an e-commerce channel. MACOM Technology Solutions Holdings, Inc. was incorporated in 2009 and is headquartered in Lowell, Massachusetts.”  Yahoo Finance




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