Alpha and Omega Semiconductor Limited (NASDAQ: AOSL) shares plunged over 6% in after-hours trading on Monday after the chipmaker reported weaker-than-expected profits for its fiscal first quarter of 2025.
The Sunnyvale, California-based company reported revenue of $181.9 million for the quarter ended September 30, 2024, a 0.7% increase from the prior-year period but slightly below analysts' expectations. Non-GAAP net income came in at $6.4 million, or $0.21 per diluted share, missing the consensus estimate of $0.22 per share.
Alpha and Omega's gross margin contracted to 24.5% from 28.2% a year ago, as the company cited the impact of higher material costs and unfavorable product mix. Non-GAAP operating margin also declined to 4.3% from 6.2% in the year-ago quarter.
"Our fiscal Q1 results were in-line with our revenue and EPS guidance driven by sequential growth in each of our major segments," said CEO Stephen Chang. "Looking into the rest of calendar year 2024, we anticipate a typical seasonal decline in notebooks and smartphones that will lead to a sequential decrease in December quarter revenue."
For the fiscal second quarter, Alpha and Omega expects revenue in the range of $160 million to $180 million, with gross margin projected at 24% to 25%. The company also guided for operating expenses between $37.8 million and $39.8 million.
Analysts expressed concerns over the weaker-than-expected profitability and muted forward guidance, citing macroeconomic headwinds and intensifying competition in Alpha and Omega's core markets. The after-hours sell-off reflects investor disappointment with the company's performance amidst a challenging environment.
Alpha and Omega Semiconductor is a designer and supplier of power semiconductors and power management integrated circuits, serving markets such as portable computers, flat-panel TVs, LED lighting, smartphones, and automotive electronics.
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