MACOM’s net income triples to $100.7M as Margins Expand

Diluted earnings per share increased to $1.28 from $0.48, while adjusted EPS rose to $1.40 from $0.90. The company expects fourth-quarter revenue of $415 million to $425 million, up 21% to 24% from the previous quarter.

MACOM expects an adjusted gross margin of 60% to 61% in the fourth quarter. Adjusted diluted EPS is expected to be between $1.97 and $2.03, based on a 3% non-GAAP tax rate.

MACOM’s adjusted EPS rose to $1.40 from $0.90 a year earlier and $1.09 in the previous quarter. The increase was faster than the 18.4% sequential revenue growth, showing stronger margins alongside higher sales.

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For the fiscal fourth quarter, MACOM expects revenue of $415 million to $425 million representing 21% to 24% sequential growth. The guidance sets a higher bar for the company after it's strong third quarter performance.

MACOM expects an adjusted gross margin of 60% to 61% in the fourth quarter, slightly above the 59.7% reported in the previous quarter.

The company expects adjusted diluted EPS of $1.97 to $2.03, based on a 3% non-GAAP tax rate and 78.9 million diluted shares. These are estimates and could change.

The difference between GAAP and adjusted net income this quarter—$100.7 million versus $109.8 million—also shows that some costs excluded from adjusted results still affect the business.

Hedge fund ownership of MACOM increased from 45 to 59 funds in the latest quarter, showing stronger institutional interest. Short interest stands at just 3.57% of the float, suggesting limited bearish pressure.

However, MACOM’s forward P/E was 30.40 as of September 4, meaning the stock already reflects much of its expected growth. Any weaker-than-expected results next quarter could put pressure on the shares.

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