Semtech shares sink on lower earnings outlook
Shares of Camarillo-based Semtech Corp. plunged 11.2 percent on Dec. 19 after the company downgraded its revenue and profit outlook for the fourth quarter.
The chipmaker said it now expects fourth-quarter revenue in the range of $120 million to $130 million, down from previous estimates of $132 million to $144 million. It expects earnings per share of between 0 cents and 8 cents, compared to previous projections of 9 cents to 18 cents.
Semtech pinned the shortfall on delays in carrier capital expenditures and a six-month delay in the ramp of a new consumer mobile platform. Following the announcement, its share price sank more than 11 percent before regaining some of its loss. By mid-day trading, shares were down 10.3 percent to $25.17.
In the same announcement, Semtech said that it is combining its advanced communications business segment and its Gennum product groups into a new signal integrity and timing product group. The combined product group will be led by Gary Beauchamp, who was previously senior vice president and general manager of Semtech’s Gennum Product Group. Semtech purchased Canadian firm Gennum, which makes chips used by video firms for high-integrity signals, last year for $494 million in its largest acquisition to date.
Semtech said it will provide investors with more information on the financial implications of the new product group when it releases fourth-quarter results in March. The company is slated to participate in a conference call on Friday. Dec. 20 at 10 a.m. Pacific time. The dial-in information can be accessed on the investor relations section of the company’s website at http://investors.semtech.com/.[wikichart align=”center” ticker=”SMTC” showannotations=”true” livequote=”true” rollingdate=”6 months” width=”580″ height=”300″]