Recently announced,
LSI Corporation
(
LSI
) upgraded its guidance for its upcoming first quarter of 2012.
Management stated that the company has been experiencing steady
sales in its flash-based products and also witnessing a strong and
fast convalescing hard disk drive business.
LSI Corp. now expects revenues to fall between $585 million and
$615 million, from its previous guidance of $550 million and $590
million. The company reported revenues of $523 million in the last
quarter, which was grossly affected by the floods in Thailand. It
is praiseworthy that the company is showing signs of steady
recovery so soon in its first quarter of 2012.
The company's employees have been able to regain productivity
levels efficiently of late. This has induced management to escalate
its GAAP income from continuing operations to 6 cents per share -
10 cents per share, rising from its previous expectation of a loss
of 7 cents per share - earnings of 3 cents per share. Excluding
one-time items and stock-based compensation, Non-GAAP income from
continuing operations is now perceived to fall between 12 cents per
share - 16 cents per share, elevating from 9 cents per share - 15
cents per share.
It is to be noted that the net income revision has come forth
after an increase in the dilutive share count of LSI from 575
million shares to 590 million shares. Apart from operational
excellence, a one-time tax benefit of $41.7 million accruing from
the SandForce acquisition can be ascribed to the appreciation of
net income that management now forecasts for its first quarter of
2012.
LSI Corp. has reinstated its guidance on margins for first
quarter 2012. In this regard it remains perspicacious about GAAP
gross margin to fall at around 45% which is towards the higher end
of previously expected ranges of 42% - 46%. After accounting for
special items of about $40 million, the non-GAAP gross margin
expectation comes in at around 52% for the coming quarter.
While the company seems to maintain a formidable stature to fend
off competition, it should remain wary of a few big players which
are treading a similar path of advances.
MEMSIC, Inc.
(
MEMS
) recently reported record revenues of $21.5 million, rising around
89% year over year and also projected an annual revenue increase of
39% - 46% in its upcoming quarter. Other competitors posing serious
threat to LSI Corp. are
Cabot Microelectronics Corp.
(
CCMP
) and
Silicon Motion Technology Corp.
(
SIMO
).
We continue to maintain a Neutral recommendation on LSI Corp.
Our view is supported with a Zacks #3 Rank on the stock which
translates into a short-term rating of Hold.
CABOT MICROELEC (
CCMP
): Free Stock Analysis Report
LSI CORP (
LSI
): Free Stock Analysis Report
MEMSIC INC (
MEMS
): Free Stock Analysis Report
SILICON MOTION (
SIMO
): Free Stock Analysis Report
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