Semtech, a Camarillo semiconductor company specializing in Internet of Things applications, announced earnings on Dec. 2 that beat both the previous quarter and analysts’ estimates.
Shares of Semtech were trading at just under $70 my midday on Dec. 3, the highest stock price in the company’s history. The company’s shares are up 23% in the past month.
Semtech’s earnings of 28 cents per share for the third quarter of 2020 were up from 21 cents per share a year earlier. The company also declared non-GAAP earnings of 47 cents per share, up from 41 cents a year earlier.
Sales in the quarter were $154.1 million, a 9.3% improvement from the previous year’s third quarter.
For the year, Semtech has netted $44.2 million through the third quarter, up 53% from the same period in 2019.
“We were very pleased to deliver Q3 results that were at the upper end of our guidance,” Semtech President and CEO Mohan Maheswaran said during the company’s earnings call. “We look forward to ending a very challenging year on a strong note. We believe that our strong business fundamentals position us nicely to continue to deliver growth and solid financial results.”
According to Maheswaran, shipments into Asia accounted for 80% of the net sales in the third quarter, while North America represented 12% and Europe the remaining 8%.
Emeka Chukwu, Semtech’s CFO, said the market for Semtech’s data center customers has softened as the year has progressed, but the demand for higher-bandwidth data center connectivity remains strong.
During the third quarter, Semtech also announced a partnership with Amazon’s Sidewalk platform to extend home network connectivity for indoor and outdoor smart home products.
Chukwu added that the company is also expecting 5G infrastructure spending to grow over the next few years.
“We believe the secular trends, led by the upgrade of data center connectivity, and the expansion of 10 gigabyte port and 5g wireless network capabilities should drive huge demand for optical platforms across all our target infrastructure markets,” Chukwu said.
At the end of the third quarter, Semtech had $262.2 million in cash and cash equivalents and assets worth $1 billion.