) lowered its revenue and earnings expectations for the fourth
quarter of fiscal year 2014.
The company now expects sales of $120.0-$130.0 million versus
its previous guidance of $132.0-$144.0 million. The GAAP earnings
outlook has been trimmed to 0-8 cents from the previous guidance
of 9-18 cents, while non GAAP earnings outlook is down to 18-24
cents from the previous guidance of 29-37 cents.
Management stated that the guidance cut was on account of
continuous delays in capital expenditure by telecom companies and
the release of a new consumer mobile platform.
Additionally, the company announced that it is combining its
Advanced Communications and Gennum Product Groups into one new
group named Signal Integrity and Timing Product Group to make
better use of natural synergies. Gary Beauchamp will lead the new
In order to improve its competitive position in both the long
and short run, it is imperative that Semtech continues to
undertake various initiatives and develop new products. We
believe the restructuring of its product groups will have
positive implications on the company's financials, going
Semtech manufactures a wide range of analog and mixed-signal
semiconductors, including Standard Semiconductor Products,
Rectifier and Assembly Products and Other Products. Though we
remain encouraged by the company's new design wins and various
product introductions, the slowing demand and challenges in
several key end markets will likely weigh on the near-term growth
The company reported a weak quarter, with revenues of $141.0
million, down 14.5% sequentially and 12.4% year over year.
However, earnings of 27 cents per share were in line with the
Zacks Consensus Estimate.
Other Stocks to Consider
Currently, Semtech has a Zacks Rank #5 (Strong Sell). Other
better-ranked stocks that are performing well at current levels
Montage Technology Group Ltd
). All these stocks carry a Zacks Rank #2 (Buy).
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