Semtech Embraces Q3 Earnings, But Shares Drop

Semtech Corporation (NASDAQ: SMTC) faded in price Thursday, after the company reported upbeat earnings for its third quarter, but issued light fourth quarter sales and earnings guidance.

Semtech on Wednesday reported fiscal third-quarter profit of $13.3 million.

The Camarillo, California-based company said it had net income of 20 cents per share. Earnings, adjusted for one-time gains and costs, came to 54 cents per share.

The results topped Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 49 cents per share.

The chipmaker posted revenue of $150.3 million in the period, falling short of Street forecasts.

For the current quarter ending in January, Semtech expects its per-share earnings to range from 40 to 42 cents.

The company said it expects revenue in the range of $131.5 million to $135.5 million for the fiscal fourth quarter.

Semtech CEO Mohan Maheswaran said, “We are pleased with the strong momentum from our key growth initiatives through the first three quarters of the year. Non-GAAP net sales increased 13% through the first nine-months of fiscal 2018, while non-GAAP operating income increased at nearly three times that rate, demonstrating the leverage of the model."

"Despite the outlook for a more seasonal pattern for fiscal Q4, we expect the momentum from our strategic growth engines in the IoT, high-performance mobile and data center markets to contribute to a record annual financial performance for fiscal 2018 and provide a platform for growth again in fiscal year 2019."

Semtech shares have increased 16% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $36.55, an increase of 29% in the last 12 months.

Stocks dawdled $3.12, or 8.6%, Thursday to $33.40.