Power Integrations (POWI) Q3 earnings: what to expect

What happened

Power Integrations, a semiconductor designer, reports earnings Wednesday after the market closes. Last quarter it beat analysts' revenue expectations with $118.9 million, up 2.7% year on year. This quarter, the market expects revenue to grow 6% year on year.

Confirmed

Global impact / market context

Investors expect growth to speed up to 6% from 2.7%, so the results will show whether demand for its chips is improving. Because the company has often beaten Wall Street's expectations, a miss could change how investors value the stock.

Analyst inference

Other analog semiconductor companies have already reported strong results. Impinj grew revenue 16.7% and beat expectations by 4.4%, while Monolithic Power Systems grew 63.1% and beat estimates by 3.4%. These results suggest demand in the industry may be strong.

Analyst inference

What to watch

1. Watch whether Power Integrations' revenue grows 6% year on year, matching what the market expects this quarter, compared with the 2.7% increase it reported a year earlier. Confirmed
2. Watch whether the company reports profit per sale and operating income above analyst estimates, since it beat both measures last quarter and has a history of exceeding Wall Street's expectations. Analyst inference
3. Watch how the stock trades after the results and whether Power Integrations follows peers like Impinj, which rose 3.4%, or Monolithic Power Systems, which was unchanged. Analyst inference

Evidence

• stockstory.org