Semtech Corp Q3 Guidance Disappointing (SMTC)

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Although improved margin and higher revenue helped  Semtech Corp. (NASDAQ: SMTC) to post 91% jump in fiscal second quarter profit, shares tumbled nearly 9% in aftermarket hours as the chip maker provided downbeat guidance for the current quarter.

The Company anticipates weaker demand as its major customers are reducing the inventory levels. Speaking to analysts in a conference call, Semtech’s CEO, Mohan Maheswaran said that the demand will remain sluggish in the second half of the current fiscal year.

For the current quarter, the Company expects earnings to be in the range of 31 cents to 37 cents a share on sales of $135 million to $145 million. Analysts’ consensus estimate was for earnings of 54 cents a share on sales of $169 million, according to a data compiled by Thomson Reuters.

For the latest period ended July 28, the Camarillo CA based company posted a net income of $19.1 million or 28 cents a share compared to a profit of $10 million or 15 cents a share.

Stripping out onetime items such as stock based compensation, charges linked to a recent acquisition and other expenses, adjusted earnings stood at 52 cents a share up from 41 cents in the year-earlier quarter. Revenue climbed 9.5% to $165 million.

Earlier in May, the Company projected earnings of 50 cents to 56 cents a share on sales of $164 million to $172 million.

Gross margin improved to 61% from 49.5% but operating expenses rose 6.2% in the latest period.

 








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Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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