Diodes reports Q1 EPS 19c, consensus 15c

Reports Q1 revenue $332.1M, consensus $323.27M. Gary Yu, President of Diodes (DIOD), stated, “We delivered another quarter of year-over-year growth, achieving 10% as the recovery in our target end markets continues to improve. First quarter revenue exceeded our expectations due to better than seasonal performance in the computing market in Asia, primarily driven by increasing opportunities for Diodes’ products in AI-related applications. Additionally, we are seeing improving market conditions in Europe and North America as those regions have begun to show signs of rebounding from recent lows. Our automotive and industrial markets totaled 42% of first quarter product revenue as we continue to see expanding automotive content and design opportunities. Another notable indication of improving conditions is channel inventory dollars and days have continued to decrease and appear to be more aligned with real demand and historical POS levels. Although the inventory depletion is a positive sign for Diodes and the broader market, the reduction in channel and internal inventory combined with absorbing the Chinese New Year holiday temporarily limited increased loading at our manufacturing facilities, and therefore, gross margins. As channel inventory continues to normalize and global demand improves, we should see a more material expansion to gross margin in future quarters. Additionally, qualifying more products in our internal facilities to increase loading combined with recovery in our higher margin automotive and industrial markets will also contribute to driving future margin improvement. As further evidence of our increasing momentum, we are guiding for the third consecutive quarter of year-over-year growth, with the second quarter also expected to be the first quarter of both year-over-year and sequential growth in this recovery cycle. Even though the global markets remain dynamic, especially with the recent tariffs, Diodes is strategically positioned to meet global customers’ needs with our hybrid manufacturing model and internal facilities located across the U.S., China, Taiwan and the U.K.”