) reported first quarter 2014 non-GAAP net income (excluding
one-time items) of $29.1 million or 7 cents per share compared
with $13.6 million or 3 cents per share in the year-ago quarter.
Adjusted earnings for the reported quarter beat the Zacks
Consensus Estimate of 2 cents. The year-over-year improvement in
earnings is primarily due to higher revenues and lower operating
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GAAP net income in first quarter 2014 was $2.2 million or 1 cent
per share compared to a loss of $47.7 million or 11 cents per
share in the year-earlier quarter. The year over year increase in
GAAP earnings in the reported quarter was due to high
restructuring and settlement charges witnessed in first quarter
Atmel reported net sales of $337.4 million in the reported
quarter, up from $329.1 million in the year-ago quarter. The
increase in revenues was driven by improved performance in
microcontroller business and new product introductions.
However, net sales missed the Zacks Consensus Estimate of $325
million. Geographically, Asia represented 53% of total revenue,
while EMEA (Europe, Middle East and Africa) contributed 30% of
revenues and the Americas accounted for 17% of revenue.
GAAP gross margin improved to 41.5% in the reported quarter from
39.9% in the prior-year period. Non-GAAP gross margin also went
up to 44.0% in the first quarter of 2014 from 40.5% in the first
quarter of 2013.
Total operating expenses in the quarter stood at $332.6 million
versus $391.5 million in the year ago quarter.
During the reported quarter, Atmel introduced new products and
released a new ARM cortex-M0+ family of ultra-low power
microcontroller products, which offer expanded connectivity and
communications functionality for industrial, consumer and medical
applications. Atmel is increasingly focusing on its core
microcontroller business as it aims to target high-growth
businesses. These controllers deliver high performance and lower
power consumption and are also claimed to be more effective than
other available variants in the market.
Balance Sheet and Cash Flow
The company ended the quarter with cash and cash equivalents of
$255.5 million, down from $276.9 million as of Dec 31, 2013. Cash
provided by operations totaled $46.2 million for the reported
quarter versus cash utilization of $12.0 million in the year-ago
As part of its share repurchase program, Atmel repurchased 6.9
million shares during the reported quarter at an average price of
$7.97 each. Since the inception of the share repurchase program
in the second half of 2010, the company has repurchased
approximately $716 million worth of stock.
For the second quarter of 2014, the company expects revenues in
the range of $348 million and $364 million. Non-GAAP gross margin
is expected to increase by 25 basis points to 45.25%.
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 new product portfolio to drive its earnings and margins.
Other Stocks to Consider
Atmel currently has a Zacks Rank #4 (Sell). Stocks that look
promising in the industry and are worth a look now include
), carrying a Zacks Rank #1 (Strong Buy) and
Avago Technologies Ltd.
Freescale Semiconductor, Ltd
), both carrying a Zacks Rank #2 (Buy).