Chipmaker Allegro MicroSystems on Tuesday beat Wall Street's targets for its fiscal third quarter and guided higher for the current period, thanks in part to robust automobile chip sales. ALGM stock jumped on the news.
The Manchester, N.H.-based company earned an adjusted 35 cents a share on sales of $248.8 million in the quarter ended Dec. 23. Analysts polled by FactSet had expected Allegro earnings of 32 cents a share on sales of $245.2 million. On a year-over-year basis, Allegro earnings jumped 84% while sales increased 33%.
Allegro credited strong sales of chips for automotive and industrial applications for its better-than-expected results.
For the current quarter ending March 31, Allegro forecast adjusted earnings of 36 cents a share on sales of $265 million. That's based on the midpoint of its guidance. Wall Street had predicted earnings of 32 cents a share on sales of $252.3 million in the fiscal fourth quarter.
ALGM Stock Rises On Report
On the stock market today, ALGM stock climbed 10.9% to close at 38.17.
Sales of chips for electric vehicles and advanced driver-assistance systems boosted the company's results, Chief Executive Vineet Nargolwala said in a news release. Also, Allegro's industrial chip business benefited from ongoing growth in clean energy and industrial automation end markets.
"With Allegro's strategic alignment to fast-growing secular megatrends, we expect to continue to outperform the broader end markets we serve," Nargolwala said.
Allegro Is Top-Ranked Chipmaker
ALGM stock ranks first out of 31 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has a best-possible IBD Composite Rating of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
ALGM stock is on two IBD stock lists: Leaderboard and IBD Tech Leaders.
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