Why Semtech Corporation Shares Popped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Semtech Corporation (NASDAQ: SMTC  ) jumped more than 10% early Thursday, then settled to close up around 5% after the semiconductor supplier released better-than-expected first-quarter results.

So what: Quarterly revenue fell 18% year over year to $132.9 million, which translated to adjusted net income of $21.8 million, or $0.32 per diluted share. Analysts, on average, were looking for adjusted earnings of $0.30 per share on sales of $130.3 million.

For the current quarter, Semtech sees net sales of $138 million to $146 million, which should result in adjusted earnings per share of $0.36 to $0.42. The mid-point of both ranges sits above analysts' expectations for earnings of $0.38 per share on revenue of $138.4 million.

Now what: After noting Q1 strength in high-end consumer and enterprise computing markets, Semtech CEO Mohan Maheswaran added, "Bookings were strong during the quarter and we enter Q2 with a higher sequential backlog. We are pleased with our pipeline of new innovative platforms, our new product introductions and our continued design win momentum which we believe will drive future growth for us."

Semtech also repurchased roughly 385,000 shares last quarter for $10 million -- and it's hard to blame them considering even after today's pop, shares currently trade just above 12 times next year's estimated earnings. Assuming Semtech can maintain its strength and remain consistently profitable from here, I think the stock could continue rewarding investors going forward.

Your credit card may soon be completely worthless
If Semtech isn't your bag, don't worry; there are plenty of other great stocks out there! In fact, the plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. And when it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2969178, ~/Articles/ArticleHandler.aspx, 10/25/2014 7:02:09 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 21 hours ago Sponsored by:
DOW 16,805.41 127.51 0.76%
S&P 500 1,964.58 13.76 0.71%
NASD 4,483.72 30.92 0.69%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2014 4:00 PM
SMTC $23.89 Up +0.08 +0.34%
Semtech Corp CAPS Rating: **

Advertisement