Acquisition Adds Value for Semtech

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Shares of Semtech Corp. got a much needed jolt after the company reported revenue gains and a promising outlook.

After the Camarillo semiconductor manufacturer reported third quarter revenue above consensus estimates and issued fourth quarter guidance above analyst predictions, shares rose 12 percent for the week ended Dec. 5, closing at $27.97. Semtech was one of the biggest gainers on the LABJ Stock Index. (See page 28.)

Semtech’s shares had slumped over the summer due to weak spending industrywide. But with this latest turnaround, the company is outperforming many of its peers.

In the past year, Semtech’s shares have surged nearly 17 percent, while the average of 15 publicly traded semiconductor companies has remained flat. Semtech’s one-year total return is up nearly 17 percent, versus an industry average 2 percent.

Semtech develops chips for high-end consumer, computing, communications and industrial equipment.

In its recent earnings, the company reported quarterly net income of $16.6 million, down 39 percent from the same period a year earlier. Revenue rose nearly 30 percent to $161 million, beating analyst estimates by $10 million.

Chief Executive Mohan Maheswaran attributed the company’s revenue growth in part to its recent acquisition of Gennum Corp., a Canadian chip distributor in Burlington, Ontario. Gennum sells a chip for the high-speed Thunderbolt cable that Apple Inc. now uses for some of its Mac computers.

Maheswaran was not made available to comment for this story.

The company expects fourth quarter

adjusted net income between 41 cents and 45 cents per share on revenue between $148 million and $154 million. Analyst predictions fell on the low end of that range.