DOW JONES NEWSWIRES
Semtech Corp.'s (SMTC) fiscal second-quarter profit dropped 36%
on lower sales and margins, although the company reported increased
demand in some segments.
Shares fell 3% to $17 in after-hours trading as the
semiconductor company forecast fiscal third-quarter earnings below
Wall Street's expectations. The stock has doubled from a six-year
low in November.
Still, Semtech expects higher revenue growth in the current
quarter than analysts estimated and its second-quarter results
topped its own guidance.
"Semtech delivered solid financial results in the second quarter
as we saw stronger demand from the high-end consumer,
communications and computing segments," said Chief Executive Mohan
Maheswaran.
Semtech, hurt along with other chip makers by a drop in demand
since last fall, has been shifting its focus to higher-profit
growth opportunities from commodity-like businesses. Several chip
makers have noted an improving market, including Analog Devices
Inc. (ADI) on Tuesday.
For the quarter ended July 26, Semtech, which makes analog and
mixed-signal chips, reported a profit of $7.4 million, or 12 cents
a share, down from $11.7 million, or 19 cents a share, a year
earlier.
Revenue dropped 15% to $66.3 million.
In May, Semtech predicted earnings, including items, of 9 cents
to 11 cents a share and revenue of $62.5 million to $64.9
million.
Gross margin slipped to 54.5% from 54.9%, while inventory slid
4.8% since Jan. 25.
Looking ahead, Semtech expects fiscal third-quarter earnings of
12 cents to 14 cents a share and sequential revenue growth of 6% to
10%. That revenue growth would put the figure above the $67.8
million projected by a Thomson Reuters analyst poll.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com