Atheros: Listen for Q2 Guidance

Atheros Communications: Q1 Earnings Preview

Atheros Communications, Inc. (ATHR - Analyst Report, Hold) is expected to release its fiscal Q1 results on April 23. We are expecting the company to post $80.4 million in revenues with non-GAAP EPS of $0.03. This compares to consensus revenue estimate of $83 million and pro-forma EPS of $0.04. For the full fiscal year, we currently expect the company to report revenues of $370 million and non-GAAP EPS of $0.32.

Following sell-side downgrades recently, shares of ATHR dropped nearly 5% and then bounced back over 16% before dipping again slightly. ATHR is up around 4% in trading so far today. Keep in mind that ATHR’s 52-week high was $34.75 back in August 2008 before it tumbled to $11.26 in November along with broader market averages.

Although fundamentals remain weak, particularly in terms of pricing environment in the wireless LAN area and possible market share loss in both mainstream and high-end notebooks, ATHR stock appears to have discounted the Q1 results and looking forward to Q2. We believe Q2 guidance from the company will be vital for the share price performance in the near-term.

We currently expect ATHR to report $85 million in revenues in Q2 and non-GAAP EPS of $0.05. It is likely that company will report an upside to our Q1 estimates and provide in-line guidance for Q2.

We currently have a Hold rating on shares of ATHR.