PMC-Sierra Posts Slight Revenue Decline as Suitors Await

PMC-Sierra Inc., a chip maker that has been the subject of an acquisition battle, said Monday third-quarter revenue fell 1.4%.

Revenue was within the range the company projected in July, while earnings excluding items were above its guidance. In after-hours trading, PMC-Sierra shares were flat at $11.66.

PMC-Sierra, which makes products for storage, optical and mobile networks, announced on Oct. 5 that it would be sold to Skyworks Solutions Inc., a chip supplier for Apple Inc., for $2 billion in cash, or $10.50 a share.

Two weeks later, Microsemi unveiled an unsolicited bid cash-and-stock bid worth about $2.2 billion, or $11.50 a share.

PMC-Sierra said on Oct. 20 that its board still recommended the Skyworks deal. However, the company said Microsemi's approach "would reasonably be expected to lead to a superior proposal" and said it would hold talks with Microsemi.

In July, PMC-Sierra said 2015 had been "weaker than expected in the carrier and storage end markets." The company said it would cut about 200 jobs, or 14% of its workforce, to reduce spending in a "tepid growth environment."

For the quarter ended Sept. 30, PMC-Sierra earned $6.7 million, or three cents a share, compared with a profit of $5.5 million, or three cents a share, a year earlier. Earnings excluding items were 13 cents a share. Revenue fell to $133.6 million from $135.5 million.

The company had projected earnings excluding items of 11 cents to 12 cents a share on revenue of $126 million to $136 million.

Semiconductor makers have seen a wave of consolidation this year, including Avago Technologies Ltd.'s sector-record $37 billion purchase of Broadcom Corp., announced in May. In part, chip makers are responding to intense competition that is crimping revenue. Reducing the number of suppliers can ease price competition, and help the survivors combine complementary product lines, industry executives say.

Write to Josh Beckerman at josh.beckerman@wsj.com

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(END) Dow Jones Newswires

October 26, 2015 18:45 ET (22:45 GMT)

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