Semtech
shares were climbing on Thursday after the semiconductor supplier reported a surprise adjusted profit. It’s a bright spot for the company after the stock plunged to its lowest level in more than six years in recent months on weak demand.
Semtech
(ticker: SMTC) shares were up 25% in premarket trading on Thursday at $28.00. The shares were down 22% this year so far through to Wednesday’s close.
The hope is that a new CEO, due to start in weeks, will turnaround the company. Analysts at Piper Sandler reiterated an Overweight rating and $40 target price on the stock after the earnings report.
“We still continue to wait anxiously for the arrival of incoming CEO Paul Pickle who is expected to join by the end of the month. We suspect he will outline a strategy revolving around aggressive actions around costs leading to a turnaround for the company,” the Piper Sandler analysts wrote in a research note.
The company reported adjusted earnings of two cents a share for its first fiscal quarter, compared with 87 cents a share in the same period a year earlier. Revenue rose to $236.5 million from $202.1 million.
Analysts had expected a loss of eight cents a share on revenue of $235 million, according to a FactSet poll.
For the second quarter, Semtech forecast a range between an adjusted loss of two cents a share and adjusted earnings of six cents a share, on revenue of $233 million-$243 million.
“Semtech exceeded the midpoint of our revenue and earnings guidance as we see signs of business stabilization,” said CEO Mohan Maheswaran, in a statement. “As we continue to navigate this challenging macro-economic environment, we are taking steps to improve our operational efficiency and financial performance while focusing on executing our plans.”
Write to Adam Clark at [email protected]
Read the full article here
