Friday: Synaptics erases post-earnings losses; FY16 outlook solid, analysts defend
Down sharply this morning in response to its FQ4 miss and soft FQ1 guidance, Synaptics (NASDAQ:SYNA) managed to close up 0.1%. Likely helping: The company guided on its earnings call (transcript) for FY16 (ends June '16) revenue to rise 20%-25%, above a 19.3% consensus. (hat tip: SA commenter Philip Marlowe).
Also: Multiple analysts defended Synaptics, arguing the FQ1 guidance (blamed on LCD driver weakness) shouldn't be taken as a sign of Apple share loss. Stifel's Kevin Cassidy thinks supply chain inventory issues are the culprit, and Pac Crest's John Vinh predicts Synaptics' LCD drivers will retain their sole-sourced status with the iPhone 6S.
When asked by Needham's Rajvindra Gill about squaring the LCD driver outlook with a pending iPhone refresh, CEO Rick Bergman downplayed the magnitude of the expected sales decline, albeit without getting specific. "Specifically around [display drivers] there's various product cycles and customer ramps and so on that impact that business. And some of those were favorable in our fiscal Q4 and in Q1, they're down. Now, down is a relative term. It's relatively a small decrease in the grand scheme of things, but it is a little bit lower than what we saw in Q4. And again, we depend on certain customer ramps, inventories, where we are in the [bill of materials], and so forth."
Regarding the company's just-launched TDDI (integrated touch controller/display driver) ICs, Bergman cautioned design wins could take longer to ramp than for standard touch controllers, but added TDDI could provide a lift in the second half of FY16. CFO Wajid Ali stated TDDI gross margins should be higher than LCD driver GMs.
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