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Atmel Beats on Q3 Adjusted Earnings

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Atmel Corporation reported third-quarter 2013 non-GAAP net income (excluding one-time items) of $37.7 million or 9 cents per share compared with $43 million or 10 cents per share in the year-ago quarter. The adjusted earnings for the reported quarter beat the Zacks Consensus Estimate of 6 cents.

GAAP net income in the quarter was $5.4 million or a penny per share compared with $21.6 million or 5 cents per share in the year-earlier quarter.

The company reported net sales of $356.3 million, down 1% year over year and it marginally missed the Zacks Consensus Estimate of $357 million.

GAAP gross margin was 40.3% in the reported quarter, compared with 43.1% in the prior-year period. Non-GAAP gross margin was 43.1% in the third quarter of 2013 versus 43.7% in the third quarter of 2012.

Operating margin was 3.1% versus 7.6% in the year-ago quarter. Non-GAAP operating margin was 10.6 % in the third quarter of 2013 versus 12.7% in the third quarter of 2012.

During the reported quarter, Atmel was the first to market flexible smart energy platform that is built around dual-core ARM Cortex-M4 architecture for smart grid communications, electricity, gas and water metering systems and energy measurement applications. The company launched new products with maXTouch inside including smartphones, Android and tablets. Additionally, the company launched new RF receiver family featuring the industry's lowest power consumption for the automotive and smart RF markets.

Additionally, the company introduced other products and launched low-power ARM Cortex-M0+ product family to further aid growth in the microcontroller business.

Share Repurchase

As part of its share repurchase program, Atmel repurchased 4.6 million shares during the reported quarter at an average price of $7.52 each.

Balance Sheet and Cash Flows

The company ended the quarter with cash and cash equivalents of $268.8 million, down from $293.4 million as of Dec 31, 2012. Cash provided by operations totaled $82.1 million for the reported quarter versus $53.6 million provided by operations in the year-ago period.

Moving Forward

Atmel is continuously upgrading its product portfolio to fuel growth and thwart intense competition and price wars from rivals. Moving ahead, the company expects improving business conditions and product portfolio to drive its earnings and margin expansion.

Atmel currently has a Zacks Rank #2 (Buy). Other stocks that look promising and are worth considering in the industry include Cirrus Logic Inc. (CRUS - Free Report) , carrying a Zacks Rank #1 (Strong Buy), and Alpha & Omega Semiconductor, Ltd (AOSL - Free Report) and Amkor Technology, Inc (AMKR - Free Report) , both carrying a Zacks Rank #2 (Buy).

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