Lattice Semiconductor Corporation
) increased its revenue expectations for the first quarter of
The chipmaker now expects sales to increase approximately
6%-8% sequentially versus its previous guidance of a decline of
Management expects revenues to increase on account of strength
in the communications and consumer markets. These markets are
likely to benefit from increased spending by telecom companies
Telecom companies are expected to spend more on wireless and
wireline network upgrades this year, thus benefitting Lattice.
The communications and consumer markets represented approximately
46% and 15%, respectively of the company's fourth-quarter
Additionally, Lattice continues to gain traction in these
markets led by its iCE field programmable gate array
(FPGA)products. FPGAs are semiconductor devices that allow
programming/reprogramming even after the device has been
According to a
Research and Markets
report, the global FPGA market is poised to grow at a compounded
annual growth rate (CAGR) of 10.4% from 2011 to 2015 driven by
the growing demand for customizable integrated circuits (ICs).
The bright prospects in the FPGA space can prove to be a
long-term growth driver for Lattice.
Additionally, the company expects gross margin to be at the
lower end of its prior guidance of approximately 54% (+/-2%) due
to expectations of higher revenues. Total operating expense
guidance of approximately $35.5 million, which includes
approximately $0.5 million of restructuring charges, is expected
to remain unchanged.
Late last year, the company had taken steps to restructure its
sales and marketing functions, which would reduce operational
spending by approximately $12 million annually. The company
expects to incur total restructuring charges of approximately$6
million, of which $5.4 million was recognized in the fourth
It is imperative that Lattice continues to undertake various
initiatives and develop new products, keeping in mind the
interest of the organization in both the long and short run. We
believe the restructuring action and new products in both
consumer and non-consumer segments will bring in stability and
steady earnings growth in the near future.
Lattice Semiconductor designs, develops and markets high
performance programmable logic devices and related development
system software. The company's fourth-quarter revenues were down
6.1% from the year-ago period to $70.2 million due to lower
programmable logic devices (PLD) revenues. Revenues for FPGA were
also down 5.4% year over year to $20.9 million.
Currently, Lattice has a Zacks Rank #3 (Hold). Other
semiconductor stocks that have been performing well and are worth
), both carrying a Zacks Rank #2 (Buy).
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