Silicon Labs Shares Hit 52-Week Low on Consumer Demand Slowdown
Silicon Labs projects revenue of $245 million-$255 million for Q4, with a slight increase for Industrial and Commercial but a decline in Home and Life on a “slowdown in customer demand on certain programs,” said Chief Financial Officer John Hollister…
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on the company’s Wednesday Q3 earnings call. Revenue in Q3 grew 3% sequentially and 46% year on year to $270 million for the quarter ended Oct. 1, with Home and Life up 36% to $124 million, it said. The company continues to see a “challenging operating environment in China,” Hollister said. Its inventory level at the end of the quarter was “slightly lower” at 59 days, with ongoing COVID-19 lockdowns “impacting our distributors’ ability to ship [point of sale] to end customers, resulting in higher than average channel inventory." Hollister cited "volatile” booking patterns varying by the week. The company’s cumulative backlog declined in Q3, but it “remains high by historical levels,” the executive said. Responding in Q&A to a question on Silicon Labs’ footprint in China against the backdrop of tightening U.S. export restrictions, CEO Matt Johnson said China represents about 13%-14% of Silicon Labs' business, with a smaller percentage of supply coming out of China foundries. None of its Series 2 products is sourced in China, he said. Johnson referenced “broad softening in the consumer space,” saying the company is seeing some customers having to “run off some inventory” amid overall demand softness. The company has seen order pushouts, Hollister said, but not “meaningful cancellations.” Shares hit a 52-week low Thursday at $109.44 before closing 4.2% lower at $112.89.