Shares of human interface solutions provider Synaptics (NASDAQ:SYNA) tumbled on Friday following the company's fiscal first-quarter report. Results were mixed relative to analyst expectations, but a steep revenue decline and lackluster guidance helped drive the stock down 20% by noon.
Synaptics reported first-quarter revenue of $386.2 million, down 18% year over year but about $13.5 million higher than the average analyst estimate. Revenue from mobile products plunged 20% year over year to $331.3 million, while PC products fared better, posting a 5% decline.
Non-GAAP EPS came in at $0.96, down 36% year over year and $0.04 below analyst expectations. GAAP EPS tumbled 84% to just $0.10, driven down by lower revenue. Synaptics cut costs during the quarter, slashing GAAP operating expenses by 9.4% year over year. Share buybacks reduced the diluted share count by about 6.8%, helping to boost per-share numbers.
Synaptics CEO Rick Bergman attempted to find the good in the company's results:
We are pleased to report solid fiscal first quarter results, reflecting strong performance across several of our product platforms including our touch and display driver integration (TDDI) solutions, which reached 10 percent of total revenue during the period. The continued expansion of our TDDI and fingerprint sensor growth levers remain key drivers of our business in fiscal 2017 and, in addition to our investments in new areas such as OLED technology and automotive, are setting the stage for a return to growth.
Synaptics expects to produce revenue during the second quarter between $430 million and $470 million, compared to $471 million during the second quarter of last year. A return to growth remains elusive for the company, and investors punished the stock on Friday for the steep drop in revenue and earnings.
The smartphone market is no longer growing rapidly, putting Synaptics in a difficult position. Job cuts executed earlier this year helped to reduce costs, but revenue will need to rebound for the company to return to earnings growth.