Semtech meets Street expectations after layoffs
Camarillo-based Semtech Corp. delivered earnings on par with Wall Street expectations on March 5, holding its forecast steady as it deals with the costs of laying off 6 percent of its workforce and navigating a rough patch amid several years of growth.
The company’s diluted earnings per share, excluding some one-time costs, were $1.55 for its full fiscal year, just shy of the $1.56 average estimate of 10 analysts polled by Thomson Financial Network. Semtech’s fourth-quarter earnings were 23 cents, directly in line with analyst estimates. Shares rose slightly to $25.99 in after-hours trading.
Semtech’s revenue was $595 million, a little higher than analyst expected. It said first-quarter sales should be $127 million to $133 million, in line with expectations.
When costs were included, Semtech lost $210.8 million in the fourth quarter. The bulk of that loss came from $178.9 million in restructuring costs the company incurred when it decided to pivot away from its investments in long-haul optical communications gear. That decision resulted in combining some business units and cutting 6 percent of the company’s workforce, or about 89 jobs, according to estimates based on the most recently announced headcounts.
Only $3.1 million of the $178.9 million restructuring costs were cash charges. The rest of the loss was largely on paper: $147.4 million for the impairment of goodwill and other intangible assets, $21.9 million for inventory and fixed asset reserves and $6.5 million for contract commitments.
“Despite the challenging second half and the disappointing reduction in our advanced communications product group revenue, fiscal year 2014 was another record year for revenue and operating cash flow for Semtech,” CEO Mohan Maheswaran said in a news release. “The company finished the year with a record number of new design wins and new product introductions were the highest in three years.”