Silicon Motion Technology Corp. SIMO is back on track with an earnings beat in the first quarter of 2016 after a rare miss in the preceding quarter. The company reported first-quarter 2016 adjusted earnings of 62 cents per ADS, which comfortably surpassed the Zacks Consensus Estimate of 55 cents.Following the release, shares of the company gained 1.6% in after-hours trading on Thursday.Also, non-GAAP earnings of 68 cents recorded a stellar growth of 41.7% from the year-ago figure.Impressive bottom-line growth came on the back of strong top-line performance during the quarter. This also marks the highest non-GAAP EPS growth for the company.Inside the HeadlinesSilicon Motion’s revenues in the reported quarter increased 39.8% year over year to a record $112.7 million, topping the Zacks Consensus Estimate of $105 million.Sales from mobile storage products (which include Embedded Storage as well as Expandable Storage products) continued their strong momentum, increasing 63.5% to $104 million from $63.6 million a year ago. The phenomenal performance by the mobile storage product line was largely supported by high embedded flash controllers (“eMMC”) and state drives (“SSD”) controller sales. The mobile storage products accounted for 92% of the revenue mix.Increasing adoption of SSDs at PC OEMs NAND flash partners drove SSD controller sales during the quarter. Moreover, smartphone OEM build activity gained momentum that boosted eMMC controller sales. In addition, commencement of shipping of enterprise and industrial SSD solutions to a Chinese e-commerce also supplemented sales growth during the quarter.However, mobile communications products (which include LTE transceivers and mobile TV ICs) sales declined 54% year over year to $7.0 million. Sluggishness in the global economy has impacted the company’s wireless market that has been significantly hurting sales of mobile communications products over the past few quarters.Non-GAAP gross profit in the first quarter improved 35.7% on a year-over-year basis to $57.0 million. Also, the company’s non-GAAP operating income in the quarter rose 54.9% year over year to $30.2 million.Liquidity & Cash FlowExiting the quarter on Mar 31, 2016, Silicon Motion’s cash and cash equivalents decreased to $191.0 million from $200.5 million at the end of the prior-year quarter.The company’s total cash from operating activities for the three-month period ended Mar 31, 2016 was $12.8 million, almost flat with the year-ago tally of $12.6 million.OutlookConcurrent with the quarterly results, Silicon Motion offered its guidance for second-quarter 2016. Management expects revenue growth of 5% to 10% sequentially and non-GAAP gross margin within 47%–49%. Moreover, operating margin is projected in the range of 22–%24% for third-quarter 2016.Highly optimistic about the present market scenario, Silicon Motion raised its full-year 2016 guidance. It now expects revenues to increase 27% to 32% (from the previously guided range of 12%–20%) from full-year 2015.Going forward management believes favorable activities on the part of NAND flash partners will drive impressive growth of Embedded Storage products. As the industry trend is currently skewed in favor of SSD offerings and away from hard disk drives (HDD) offerings, Silicon Motion stands to benefit significantly.Also, the company is enthusiastic about the sales prospects of Android smartphones for the remaining year. In addition, the company’s growing popularity among data centers of Chinese Internet companies and Japanese OEMs are positives that are expected to propel growth going forward.To ConcludeSilicon Motion’s return to the earnings surprise trajectory after a dismal fourth-quarter 2015 can be largely attributable to its phenomenal mobile storage product sales that have acted as a fundamental growth engine for the past year. The company has already established itself as the leading merchant supplier of client SSD controller to module makers, including most market leaders in the U.S., Taiwan and China. We believe favorable industry trends coupled with a strong portfolio bode well for the long-term growth of the company.Silicon Motion currently sports a Zacks Rank #1 (Strong Buy). Some other stocks that can be considered by investors include Advanced Micro Devices, Inc. AMD, Mellanox Technologies, Ltd. MLNX and Broadcom Limited AVGO. All three stocks carry a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BROADCOM LTD (AVGO): Free Stock Analysis Report ADV MICRO DEV (AMD): Free Stock Analysis Report SILICON MOTION (SIMO): Free Stock Analysis Report MELLANOX TECH (MLNX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research